Coronavirus: Mallorca caught in mass tourism entice as poverty rises | Enterprise| Financial system and finance information from a German perspective | DW

Tom Mardorf sees himself as one of the richer and more privileged parts of the population of Mallorca. He owns two houses on the famous holiday island, where he has lived part-time since 1996. The German businessman sold organic cosmetics and dietary supplements.

Mardorf is officially registered as a Maltese citizen because this is where his main residence is. But the 58-year-old German says he is attracted to Mallorca and comes to the Balearic Islands as often as he can. However, his visit last September was a “shock” for him, he told DW.

“The canceled summer season has left ugly wounds everywhere,” he says, adding: “Poverty is growing rapidly.”

After the first wave of the coronavirus pandemic in spring 2020, Mallorca was the first Spanish tourist resort to be allowed to reopen. But it was just that a short time that lasted no more than two months.

In the midst of the increasing infections in Spain in the summer, the four Balearic holiday islands were closed again and have been permanently closed since then. Mallorca is said to suffer the most from all Spanish resorts the collapse of tourist arrivals.

It is estimated that 75% of all income generated on the island is directly or indirectly related to the travel industry, which has led to both rising standards of living and higher costs of living for residents. “These disadvantages of mass tourism are now brutally visible,” says Mardorf.

Despite the current troubles caused by pandemics, the Balearic Islands government plans to extend the sweeping measures until March and insists that the “balancing act” is needed to avert the risk of the closure continuing during the popular Easter holiday season.

Mallorcans are increasingly angry about lockdown measures, including curfews

To make matters worse, both the national and regional governments have announced that they will be spending the EUR 140 billion (USD 169 billion) earmarked for Spain as part of the EU pandemic rescue package for purposes other than tourism. The money will go to “future-oriented industries”, says Madrid, and the regional government is prioritizing funding for universities, culture and agriculture.

Citizens’ initiatives alleviate the plight

With the drama going on in Mallorca, Tom Mardorf believes that his professional skills as a trader and money manager are needed more than ever. In collaboration with the Santa Ponsa Community Church, he organized a food bank and fundraiser. With the help of private donations that he and his team of 27 local helpers collect, they buy groceries to support around 70 families in Santa Ponsa.

Most of his fellow donors are foreigners like him, and Mardorf fears that some of them may become dependent on donations for a living if the pandemic continues.

Tom Mardorf (center) together with his employees in the pantry in Santa Ponsa

Former hotel worker Paul Cameron is one of those who deliver groceries to those in need in Santa Ponsa. The 40-year-old British national says Mallorca’s increasing poverty is not reflected in higher numbers of beggars on the streets or squatters in empty hotels. Poverty comes on “creeping feet”, he says, and affects not only unemployed restaurant and hotel workers, but increasingly architects and lawyers as well.

“We see more and more people in Palma [de Mallorca] live in tents along the street, “he told DW, adding that he, his wife and their three children can barely make ends meet by living on their savings.

For Bart Mooji, a 55-year-old restaurant owner from the Netherlands, the financial bottleneck from the lockdown is becoming more dramatic every day. He has already amassed € 23,000 in debt to cover running costs and says that aid from the Spanish government is coming too slowly. “I have received around 2,000 euros in direct aid so far. The situation is really dramatic.”

Restaurant owner Bart Mooij (left) is just one of many who don’t know if their business will survive the pandemic

The fateful dependence on mass tourism

Since most Mallorcans blame the regional government in Palma for their plight, the problem of the one-sided economic development of the holiday island goes much deeper and largely goes back to the past.

In the 1970s, former Spanish dictator Francisco Franco tried to make Mallorca a primary vacation destination for people from more affluent and more industrialized countries in Northern Europe. The concept of mass tourism was born, promoting Mallorca’s longstanding image as a place of unbridled hype and excessive fun in the sun.

The goal became a moneymaker who also made many Mallorcans richer. In the 1980s and 1990s, more and more foreigners were drawn to Treasure Island to collect some of the newfound wealth as hotel and restaurant owners, doctors, lawyers and real estate agents.

After Spain joined the European Union in 1986, Brussels fueled the boom by funding road projects and bridges, as well as high-speed rail links and airports.

But now, following the UK’s decision to leave the EU and the collapse of travel company Thomas Cook in 2019, Mallorca’s fortunes appear to be turning and the boom seems to be coming to an end. The global coronavirus pandemic is set to end the island’s mass tourism model forever.

In the small town of Santa Ponsa, which is close to rich tourist centers in the southwest of the island, poverty is not directly noticeable on the streets. In the province of Calvia, in which it is located, there are many large hotels with around 60,000 tourist beds. Nevertheless, around 1,500 households in the province are currently only dependent on social benefits, says Mardorf.

The number of food packaging delivered by the Santa Ponsa Outlet has grown steadily

The majority of the province’s wealthier residents are foreigners, including many British, Scandinavians, Germans, and Americans. He argues that they live in their luxury condos and vacation rentals and are barely aware of the plight of the local population. It’s like a parallel world where hardly anyone speaks Spanish or tries to integrate into society.

How to benefit from a pandemic

No wonder that the coronavirus pandemic also offers some people living on Mallorca a rich choice. Real estate agents are currently riding the wave of virus-induced foreclosures and bankruptcies, brokering lucrative deals for investors looking for cheaper deals, especially in the lower and mid-market where prices have fallen.

In contrast, the luxury real estate market has remained stable despite the crisis, which shows that the demand for premium real estate on the island is far from declining.

Renting a luxury villa has never been cheaper, however, as operators don’t want their prime homes to stand idle even during the lockdown. Fabian Dudek, the founder of the Berlin startup Glassdollar, took the opportunity last autumn on Mallorca when he relocated parts of his company to the island. The lockdown is “easier to maintain near the beach,” he says, and the rent he pays for his finca in Deia is “really affordable”.

For Paul Cameron, a food bank assistant, all of this is not very comforting. About 35% of those who line up at the Santa Ponsa grocery store every day are doing so for the first time in their lives, he says. “You have enormous fear and uncertainty about the future.” He would only return to the UK in an emergency, he says, because Mallorca “is actually a safe place to raise your children without drugs and social conflicts”.

Leaving Mallorca is not an option for Bart Mooji, the Dutch restaurant owner either. He has invested in his business and wants to raise his children here, he says. At the same time, he believes that the crisis “definitely changes” the holiday island.