Hotel establishments of the Balearic Islands have been favoured by a flexible legislation destined to improve the hotel sector. This has led to the appearance of category 4 * above, but is this new category advisable and, above all, profitable?

It’s been a long time since the hotel community in the Balearic Islands started an era of constant evolution. However, it’s notorious how these hotels have progressed since 2010. Since the mentioned date, hotel establishments have been favoured by a flexible legislation destined to improve the hotel sector. As a consequence, a great deal of hotels started to refurbish their facilities in order to become more qualified and attractive for guests.

Therefore, new hotel categories have settled down into the sector. One of the latest categories is the 4 star superior, which exists since 2011, when a decree introduced it. At the moment, it is regulated in the new 20/2015 decree, in development of the present law of Balearic Islands Tourism 8/2012.

In the next graphic, it’s shown the increase of hotels that have adopted the 4* superior category in Majorca:

As we can see, the more we advance, the bigger is the number of 4* superior hotels. But the question is: which implications brings this category type?

There are necessary requirements to obtain the mentioned category. The present decree establishes certain grades depending on the category. 650 points are necessary to get a 4* superior, at least. A 5 star hotel requires 700 pts, so the difference between a 4* superior and them is quite short. Besides, and not less important, minimum services or facilities for 4* superior are the same as for 4*.

Also, as we’ve said before, the present legislation doesn’t bring any obstacle for getting this new category, putting it at the same stage of a 4 star hotel in terms of salaries and minimums. So this would mean an advantage for those hotels that already have 650 pts because the category increase would be absolutely free.

Nevertheless, we have to talk about some downsides that come from this new category. The most relevant is the impact of the well-known tax law called “Ecotasa”. A 4* superior hotel guest (2€) will have to pay 0,5€ more than in a 4* hotel (1,5€).

This half euro difference may be important for the hotel commercial strategy. As an evidence, in Majorca, there’s been 3 hotels that decided to decrease their category to a 4* hotel, being previously a 4* superior.

What is more, TTOO and OTAs don’t distinguish between a 4 star and a 4 star superior, which means that the hotel marketing of a 4* superior can be a bit hampered.

Once mentioned the previous information, we can connect these ideas with a study made by the hotel factory about this new category. In this study, lots of hotels were contacted in order to obtain a clear review about the 4* star superior category.

At first sight, most of hotels are pretty satisfied with the new category. As we said before, 3 hotels decided to lower their 4* superior category because of Ecotasa. In contrast, it doesn’t seem to play an important role for the majority of hotels; they say Ecotasa is not a matter and they haven’t been damaged by the implications of this law. Most of them stated that a guest doesn’t see any problem in paying half euro more while he’s paying a room for 200€ or 300€ .

Moreover, although it’s true that TTOO and OTAs don’t recognize this new category, hotels explain that their rise to this category implies a differentiation from other hotels with less facilities. This way, guests can notice this things and the hotel occupation gets stimulated.

To sum up, the main goal of the birth of this new 4* superior category is to provide good hotels the opportunity to differentiate from their weaker competitors. Negative aspects of this category (Ecotasa and hampered marketing) have been refused by the majority of hotels contacted in the study of the hotel factory.

In conclusion, it is presumptively appropriate and profitable the increase of category for those hotels that already have the required punctuation (650 pts), although we can’t forget that not all hotels are identical and each one has its own features depending on their destiny, guest type, etc. So it’s recommendable to carry out a market study in each case, analyzing all possibilities for the requested hotel, just as the hotel factory has made and accomplished in several occasions.