What are the strategies that are being developed in Playa de Palma to recover the destination? What effects will be obtained with this type of change?

Playa de Palma, the pioneer destination of mass tourism in the 60’s, has been suffering for years hangovers of its latest decades of glory. After its greatest years not as bright years followed and hoteliers, which beat them in terms of price and facilities.

Due to this situation and to an international thriving economic juncture, Playa de Palma initiated a rehabilitation plan of the whole destination based on two strategies:  

1. Repositioning of the hotel products

• Hotel refurbishments focused on a defined segment (For example: adults only) and repositioning of its product, oriented to the catchment of the target segment. As follows, an exhaustive internal and external analysis has to be carried out, being aware of the compatibility of the segments with the hotel’s actual clientele, including a benchmark of the best practices orientated to this segment and a designed conceptualization of the products that upholds the feasibility of the project.

• Emergence of new 5* hotel products. Until 3 years ago, there was no 5* hotels in Playa de Palma. Pure Salt Garonda, by Mac Hotels, was the first to open followed by Iberostar Playa de Palma which was converted into a 5* hotel. Tho more inaugurations are expected to take place in the next months: Llaut Palace and Hipotels Playa de Palma Palace.

• Hotel companies take positions:

  

  • Enhancing their position: an example of this strategy is HM Hotels, that became the leading hotel company of the destination in terms of number of hotels, in 2015 they opened a hotel that is the most lifestyle of Playa de Palma, HM Balanguera Beach, and purchased Ayron Park, Kross and Dunas Blancas.

  • Disembarking in Playa de Palma: Hipotels opened its first two hotels in the destination (Hipotels Playa de Palma Palace 5* and Hipotels Gran Playa de Palma 4* sup.)

Investment and rehabilitation of Playa de Palma’s environment

• Opening of new complementary offer spots, such as the Enjoy International establishments, with leisure services available 365 days of the year and a thematization process of the 15 beach pubs with different styles such as “chill out” or “surfer”, transforming them into mediterranean Beach Clubs few metres from the beach.

These two strategies led to 5 positive impacts in Playa de Palma:

1. Attraction of tourists with a higher purchasing power, causing the multiplier effect in bars, shops and restaurants.
2. Increase in the value of hotel assets: Because of the hotel refurbishments that had been taking place and the increasing appetite of investors for assets in Playa de Palma, these assets incremented their value to levels never seen in this destination.
3. Lengthening of the season: facilities had been adapted to the winter and pre/post summer season, enabling the reduction of seasonality in the destination.
4. Better labour conditions: As a consequence of the lengthening of the season, job insecurity and unemployment was reduced during the winter.
5. Improvement of the economic, social and environmental results. A virtuous circle started by relying on quality based tourism instead of quantity, which generates wealth, reduces job insecurity and improves the environment.