Ibiza Clubs Not Happy

The major players in the Ibiza clubbing market, have threatened to delay until July, the opening of their premises for the 2013 season. They are complaining that smaller, independent operators, like restaurants, bars and boat parties, are taking their customers. They are claiming that these small operators are unregulated and now plan to establish a group to lobby Government to stop them damaging the clubbing image of Ibiza. Its a bit like McDonalds wanting all small cafes and mobile catering units to close, because they are affecting the image of french fries.

Ibiza is currently feeling the effects of a widespread European recession, namely in two of their biggest markets, Spain and Italy. Their second biggest market, England, is not doing so well either and customers that do eventually make it to Ibiza for a summer holiday, have a lot less spending power. Value, is now a big factor in how, when and where, they spend their hard earned and limited financial resources. To compound problems, Ibiza increased its tourist tax rate to 10% instead of decreasing it to 4%, a pre election promise by the current incumbent government. This combined with the recession, rising fuel costs and an overcrowded market, has resulted in poor returns and crowds for some of the big club nights. Already two big club promotions, Twice as Nice at Es Paradis and Monza at Sankeys, have gone bust and many more are just barely hanging on by their fingertips in the hope that July and August will save them.

The two clubs that are leading the charge on this issue are Privilege and Amnesia. Situated outside of the main resorts in San Rafel, they are suffering the most from the recession. Privilege would mainly rely on the Spanish market while Amnesia would have a broader commercial appeal. Overheads at Privilege would be a lot higher than any other club on the Island due to its size, it is in fact, the Worlds largest club. This is a problem for the commercial viability of Privilege going forward. Pacha and Ushuaia now have the top end of the market secured. Space is trendy and offers a savvy product. How much longer, during a recession, will customers keep paying high ticket prices, due in part to overpaid celebrity DJ’s, and over 1200% mark up on drink prices, is a question some clubs need to ask themselves.

The simple fact for the migration of customers to the so called “unregulated” market of boat parties, bars and restaurants, is that they offer a better value product. Unless some of the Clubs change their business model to reflect this growing trend, then they will be left behind to fade away and this most definitely, would be bad for the image of Ibiza. Instead of reacting to a problem they should be looking closer to home for the answers and solutions to their financial difficulties. Everybody in Ibiza wants a fresh and vibrant clubbing atmosphere and clubs will have to sit down and take a long hard look at their product because ordinary Joe cannot afford it any more.