From genuflection to tourism to questioning its excess in a quarter of a century

PalmMarch 14, 2001. The ITB Berlin tourism trade fair was just days away, and there was great anticipation surrounding it because the sector was intensely engaged in the debate about implementing a tax on overnight stays for visitors. It was one of the major campaign promises of the Socialist president, Francesc Antich, who had broken the right-wing hegemony in 1999. Hoteliers had been criticizing the initiative for months, even claiming that its implementation would have devastating effects on demand. The then-president of the business association, Pere Cañellas, said: "If the mere announcement of the project already causes alarm, the consequences of its implementation could be disastrous." This opposition generated a climate of political and social tension, since while many saw the ecotax as a tool to transform tourism in the Balearic Islands towards a more sustainable model, hoteliers felt it as a threat to their profitability. The tension was extreme. Not only because, according to the sector, it went against business, but because "they considered it interference. They didn't like a government, much less a left-wing one, making decisions that affected the sector," recalled Celestí Alomar, then Minister of Tourism and at that time a public enemy of the sector. But let's return to Berlin. In the midst of a crossfire between the government and the hoteliers, the GOB spokesperson, Miquel Àngel March, surprised everyone by calling a press conference at none other than the headquarters of the German federal government. German and foreign media listened to the explanations of the environmental leader, based on a very comprehensive report: "We have gone from 5.9 million tourists in 1991 to almost double that, 11 million, in 2001. The consumption of resources caused by this runaway growth is unsustainable, and you will be aware of it." That's why March was calling on the international press for "a tax to mitigate the impacts of this activity, which is not an attack, but a tool to guarantee environmental conservation and the quality of tourism." That visit to Germany still held one more surprise: a meeting with members of the German Ministry of Finance, where the environmentalists presented the draft ecotax law translated into German. One of the masterminds behind that trip, Gerald R. Hau, a geographer and member of Euronatur, recalls that "it was a significant move. The Antich government had courage, but great inexperience. Our action ensured that the entire German press saw the rigor of the GOB's analysis and that the measure wasn't a whim. Germans will be happy to pay for the environmental benefits." "When we returned to Mallorca, we met with Antich's government and confirmed that the decision to implement it was already irreversible. We modestly contributed to its approval by demonstrating that the hotel industry's alarmist claims were unfounded. Look what ended up happening. In retrospect, it's laughable."

There's no consensus even on the ecotax

Finally, Law 7/2001, of April 23, which established the tax on stays in tourist establishments (the ecotax), was approved and came into effect. Although it did not affect demand in any way—tourists arrived as if nothing had happened—it was repealed in October 2003. Jaume Matas, who would later be convicted in several corruption cases, came to power and, as he had promised during his campaign, eliminated the tax.

The controversy surrounding the ecotax, which Francina Armengol would reinstate in 2016 as part of the legislative agreements (PSIB-PSOE, MÁS, and Podemos), is an example of the difficulties the Islands have had in defining a model. "In the Balearic Islands, the idea has taken hold that without tourism people will starve, and it's not just an exaggeration, it has provoked enormous excess and subservience," says Hau.

"This first quarter of a century has marked a significant change: from a very small minority questioning the tourism industry, we have moved to a majority demanding that things be managed differently," explains Tolo Deyà, dean of the Faculty of Tourism at the UIB (University of the Balearic Islands). According to him, a key element has been the lack of housing: "The growth of tourist rentals and the entry of investors have pushed islanders out of the real estate market, which has marked a turning point in how tourism is perceived."

Unsustainable growth

The feeling of saturation experienced by islanders didn't arise from nowhere. Between 2000 and 2025, the number of legal tourist accommodation places increased from 350,000 to 607,522 (in 2023). Criticism of a model based on the ever-increasing consumption of resources has even come from within the hotel sector. Carme Riu, then CEO of one of the major multinational hotel chains founded in the Balearic Islands, said almost a decade ago: "We can't grow any more," and called for policies focused on quality. But if there's one key player in this first quarter-century regarding the growth of tourist accommodation places, it's been tourist rentals. "An invention that we all considered interesting, because it seemed like it could socialize the profits from tourism. It was about distributing what was apparently in the hands of a few families. Obviously, it was a very incomplete vision," recalls Deyà. According to 2024 data, tourist accommodations in the Balearic Islands now total 152,881 beds, not counting the illegal supply, which has grown exponentially. "Rent apartments within residential areas for tourism has had negative effects, which is why it has been gradually prohibited. As a society, we have learned that tourism must be managed carefully, and that coexistence is essential," he states.

The regulated sector itself, through the vice president of Habtur, Joan Serra, has asked the government for "much stronger action" against illegal operators. The manager of the Mallorca Hotel Federation, María José Aguiló, points out that "in ten years, tourist rentals have grown 29 times faster than hotel rentals. Almost everything has been used for tourism, damaging the experience and creating a greater sense of overcrowding."

Tourist apartments, which mushroomed more than a decade ago, are now either banned or much more strictly controlled than licensed ones. Ibiza, Tolo Deyà recalls, "was the first to address the problem and implemented the first decisive measures against illegal offerings." Vicent Marí, president of the Ibiza Island Council, stated in 2019 that the island would be "a pioneer in the fight against unregulated tourist activities," and emphasized the importance of mandatory registration and the protection of residents and visitors.

According to Antoni Riera, Professor of Economics and Director of the Impulsa Foundation, "two of the major policy responses of recent decades—the Sustainable Tourism Tax (ITS) and the 'democratization' of tourist rentals—have been presented as the most effective mechanism, as a lever for change."

The partial reconversion

The Pact for Progress, which has managed tourism for almost as many years as the People's Party (PP), took another step in 2017: Biel Barceló managed to legally establish a ceiling of 623,624 beds to contain the pressure on the island and curb uncontrolled growth. However, the left-wing coalition faced criticism from environmentalists: "They legalized thousands of irregular tourist beds and allowed thousands of houses on rural land to be used for tourism. Whether they have a license or not, in the Balearic Islands everything is tourism," laments Neus Prats, spokesperson for the GEN-GOB coalition. During this quarter-century, another key element has been the significant investment in hotel renovations. "Before, 60% or 70% of the hotels were three-star. In Ibiza, there were practically no five-star hotels, and now there are many," explains Deyà. "Hoteliers have significantly increased quality and prices, but human pressure remains. The islands are fashionable, and there is still demand."

Riera adds: "The reforms have been a requalification within the same engine, not a replacement. Improving the internal quality of tourism does not guarantee a proportional increase in per capita prosperity."

Where is the prosperity?

Despite the increase in the quantity and quality of tourists, the per capita economic return has been limited. The Canary Islands are losing more GDP per capita than less tourist-dependent regions. Riera states: "Between 2000 and 2025, real GDP per capita will fall by 2%, while Spain will grow by 21.3% and the EU by 31.2%. This demonstrates a structural divergence." According to him, the problem is structural: "If the new added value does not spill over into sectors such as knowledge, advanced services industries, or technology, the macroeconomic effect is limited. Without changes in skills, career paths, and innovation capacity, a better hotel does not automatically translate into a better economy." Thus, the increase in hotel category and the control of the irregular supply have not lessened the pressure on housing, land, infrastructure, and costs, which erodes disposable income and fuels citizens' frustration. Diversification as a solution

The Balearic economy remains a tourism monoculture, with a structural dependence that limits economic convergence. Toni Garí, an industrial entrepreneur and driving force behind the 'Construïm' collective, insists: "We have undervalued industry," and advocates for the recovery of productive sectors with added value, innovation, and export capacity. In his opinion, diversification would allow for "the creation of a more balanced and resilient economic fabric, capable of translating activity into real prosperity, not just tourist volume." However, for now, all of this is more wishful thinking than reality, as is the attempt to increase the consumption of local products without having to import, in addition to the millions of tourists, 90% of what is consumed. The resident population is demanding effective measures to access housing and avoid losing purchasing power. The challenge is clear.