In an interview with La Voz de Ibiza, Marc Rahola, founder and CEO of OD Group, a key player in the Ibiza hotel industry, is “skeptical” about the Government’s intentions to raise the eco-tax in June, July and August in order to, as Marga Prohens said, “contain the arrival of tourist flows” in high season and thus contribute to mitigate the housing crisis.
What is your opinion on the increase of the eco-tax announced by the Government?
-We have not really seen the impact yet, but when the tax was first put in place there were many complaints and in the end it has been normalized. The problem with a tax is not its implementation, but what you want to do with it. This tax is about the tourist impact and the clients that come to the hotels and that, in some way, deteriorate the territory. So, 100% should be invested in the territory. It is logical. What I would not agree with is that if you are collecting money in Ibiza, that money should go to Menorca, or that of Menorca to Mallorca. And that there really is a plan. More money for what? Every summer, for example, we have broken sewage pipes. If it is being collected, let that be fixed. We pay enough taxes, but I don’t know if they go to Madrid or the Balearics. If it’s to fix that kind of thing, that’s fine. I have always believed that the closer the collection is to the action, the better. We see it in smaller countries. But if we have to politicize those revenues, well….
So to really have an opinion, I have to see what it applies to, but historically, Spain has not been known for being tax efficient. So my position is skepticism. In Barcelona it has been done well, you pay a tax that is actually invested in tourism processes.
Tourism phobia, insane prices in Ibiza and housing crisis
All this, in a tourism-phobic context.
-Since we are talking about Barcelona, they have realized that what helps to regulate tourism are the hotels. In a hotel, those who stay there have to identify themselves. In addition, they are in places that are urbanistically suitable. The tourist apartments have atomized that and given rise to the legal and the illegal. In Ibiza, practically 45% of accommodation is not in hotels. This is also happening in Ibiza, in Venice, in Madrid, in many cities. That makes housing more expensive. The hotel was like an embassy, where travelers met. That is what a hotel can do and a tourist apartment cannot. The regulation must be there. Today, in the Balearic Islands, no new hotels can be built. Then, how is it that more people come? The ally is the hotelier: before we were the bad guys and now, little by little, it is being seen that we can help.
-Do you think that the ecotax is rewarding illegality and punishing legality?
Totally and not only with the increase of the eco-tax but also with the previous taxes. Nothing pays the illegal part.
-In addition, it leads to an increase in costs and this is reflected in prices, at a time of much criticism of Ibiza’s prices.
-I cannot pass it on to the customer because if I could I would already be doing so, as is logical. In the end there is a deflation of that tax.
–Meliá’sCEO said that hotels in Spain had the capacity to grow, in terms of prices. Among them, he gave Ibiza as an example, compared to Santorini or the Amalfi Coast. Do you agree with that statement?
-Yes. Now: it is one thing to agree that we can increase the price, because it is a fact, and it is another thing to agree that taxes should be raised. The infrastructures that Spain has are not in Greece. How many hotels are there in Santorini? In Mykonos? And it is very atomized with islands. Spain has a very powerful continental part, from Catalonia to the Costa del Sol. It has a great inland tourism, just to mention Madrid and Barcelona. Spain is a world power.
-What does that have to do with price growth capacity?
-When you have infrastructure, you have climate, you have a good health position, and the ease of access to all of this as a European, that is an advantage. We, when we retire, are hardly going to go and live in Norway, however fantastic the country may be. But a Norwegian, when he retires, will want to retire in Spain. Spain is still the Florida or California of Europe. A guy from Milwaukee, if he can, will go to Tampa or San Diego. There is no need to go to Los Angeles or Miami.
-So, if we have the capacity to raise prices, why don’t we raise them?
-It’s a travel issue. The different destinations compete. Fifteen years ago there was hardly the technology that we have today in Spain. And we have also had a lesson in hygiene from our major Spanish operators, who have been able to compete with the world’s major operators. Meliá, Barceló, Riu, Palladium, and so on. They have brought a lot of things that can be learned by competing overseas. This has given us a privileged situation and more and more. Now it is a hub of constant learning. We constantly produce very good human capital, very good technology and we put it into practice, and we compete more and more and better. That leads to a continuous improvement and that translates into a price improvement. But a very large part of the Spanish hotel and catering business is still in the process of professionalization: because, for example, it has been in the hands of families and now they are selling.
-In a recent interview with José Luis Benítez, manager of the Ibiza Leisure Association, I asked him that Ibiza is the only place in the world that doesn’t want to look like Ibiza. Agreed?
-Yes, it’s a classic. The instagrammable world we live in generates information and misinformation. The instagrammable world of show-off generates haters and lovers. Here it can’t be otherwise and that situation is generated. They say that more discos are being made and no, they are the ones that were there, they are transformed. It is not black and white. The housing problem is real and worries me, it generates an impoverishment of the destination. Hotels can solve part of that problem and they do. But because of the increase in prices, public services are deteriorating: it costs more to have policemen, teachers, doctors and more.
The problem we have is that we do not have comprehensive urban development plans. The Ibiza Town Hall has been with suspended projects for years. The city that we want is not planned: Can Misses is a dormitory, it has no life beyond when UD Ibiza plays. There has been a lack of political planning at a time when the private offer has specialized and the public one has not.
-You constantly see promotions with prices that are not for residents…
-Now we will see what happens. We have to start acting more forcefully against illegal tourism. We need to be more agile when it comes to shutting down illegal supply.
