Middle Market Absent From Ibiza 2024 High Season
Ibiza’s budget and middle tourism market has shown signs of decline this summer, with reports of low occupancy and tourist footfall in hotels, clubs, local restaurants, and retail shops. With prices continuing to rise throughout the island, the traditional European market that holidayed in Ibiza for the last two decades has deserted the island during the peak months of June, July and August. Many middle market tourists now choose to holiday during the shoulder months of April, May, September and October when prices are more reasonable. For the past three seasons, in response to the COVID-19 epidemic, Ibiza has opened early in April and has extended its season to October. Traditionally, the official tourist season coincided with the opening parties in late May and the closings in mid to late September.
Over the last decade, Ibiza has seen a sharp increase in hotel and service prices combined with the cost of living and accommodation crisis, resulting in a perfect storm battering the famous Balearic island. The hotel association blames low occupancy rates on Air B&B rooms, which offer better value for tourists visiting the island. Those rooms also affect the accommodation crisis, as before the advent of Air B&B, they were rented out to seasonal workers. The cost of living crisis is also impacting the European tourist market, with Greece reporting a significant decrease in tourist income this summer. Tourists are choosing cheaper options like Lanzarote, Benidorm and Salou as those destinations offer better value for money than more expensive resorts like Ibiza.
The island has also been experiencing a severe shortage of water supplies, with local wells running dry and desalination plants working to maximum capacity to cater to the increasing number of tourists. The issue of over-tourism has been a contentious topic in recent years, with locals protesting on the streets chanting “Tourists go home” due to the pressure tourism is placing on health services, waste management, biodiversity and housing at the expense of residents. It appears that Ibiza has responded to these local concerns by attempting to price out the low-to-middle market and adopting a quality-over-quantity approach to reducing tourist footfall on the island. This plan has already been implemented in Sant Antonio, where the local council has shut down the infamous West End area, once home to budget bars, hotels and mass tourism, especially from the UK market.
That plan has already shown positive results, with a rise in spending and a more diverse cultural market visiting Sant Antonio. Sant Antonio has also seen a surge in investment, with real estate values now some of the highest in Spain. International chains and brands are now snapping up traditional family-run businesses, which is also changing the behaviour of the tourists now holidaying in Ibiza. With improved services, more stay in their hotels longer and spend less time in local restaurants and shops, preferring to rent boats and visit beaches and clubs. Once the mainstay of the Ibiza Tourism model, the family market has all but disappeared and been replaced by increased revenue-generating adult-only hotels throughout the island. The clubbing market has also seen a significant increase in weekend tourists, with mid-week party attendance showing a decline in numbers.
The West End Strategy
I believe local government, like the West End strategy in Sant Antonio, will not deviate from the quality over-quantity plan. They will have to listen to smaller businesses complaining about loss of income and their market disappearing, but they are willing to take the small punches and see this plan out as they are in power for another four years. They are also aware that they have created a healthy market for those small and independent businesses to sell out in and are catering to the needs of the larger hotels and luxury brands.
I predicted many moons ago that Ibiza was aiming to be the new Monaco, a wealthy principality run by a royal family. The evidence suggests that this is how things are going as the prices of services and land continue to rise. I do not predict a crash in the Ibiza market, a change, yes. Ibiza has become a playground for the rich, movie, and sports stars and celebrities. Professional marketing and billions of Instagram reels reflect that trend to the world. It has been a victim of its own success. Sadly, old Ibiza is dead and gone, it’s with Padilla in the grave. A terrible beauty is born.
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