Ibiza as the epicenter of the epicenter of the crisis. If the Balearic Islands have been the autonomous community most affected by the economic and tourist crisis derived from the utility, the Pitiusas are suffering even more if possible than the rest of the archipelago. Due to the greater dependence on tourist monoculture. For the added blow to the nightlife industry and the disco fabric. And because of the closer proximity of a third impact -after the shock in supply first and in demand later- focused on the financial aspect and linked to the defaults of companies to their suppliers. However, the advances around the coronavirus vaccine and safe tourist corridors allow a thread of hope to be outlined.
This is how the vice president of the Confederation of Business Associations of the Balearic Islands (CAEB) in Ibiza and Formentera sees it, JosÃ © Antonio RosellÃ³, who confirms that “here they are suffering more because tourism monoculture is a fact”. The figures support his words: the GDP of the Balearic Islands fell by 35% in the second quarter, while in the Pitiusas it reached 40%, five points more than in the islands as a whole.
“What happens in Ibiza and Formentera is the same as what happens in the Balearic Islands but much more accentuated”, he explains to illustrate the issue with the restrictions for the Pitiusan restoration, forced until now to close at ten at night. The rule that limits mobility in Ibiza between 10 p.m. and 6 a.m. expires this Friday; Bars and restaurants may open up to two hours later as in the rest of the islands and occupy up to 30% of their interiors (capacity that may reach 60% in the coming weeks if the establishments install CO2 meters ). The use of the bars, on the other hand, will continue to be prohibited.
The volume of hotel openings at the peak of the season -July and August- did not exceed 50% of the total. At the moment, with a tiny percentage of hotels open and close to a quarantine for sale, financial engineering is being carried out to rearm the warehouses in the spring. Because spring is the goal and the starting point at the same time, at which time survival to winter and the start of recovery will be confirmed. “Most of the hotel companies are taking steps to reorganize their treasury. We are approaching a limit situation.” The objective, he asserts, is to be able to dodge the abyss with a jump right at the last moment.
If the third impact that Roselló talks about, the financial one, caused by a domino effect of company defaults, becomes a reality then a conjunctural crisis would become structural and the exit from the well would be seen much further. “The worst thing is the possible financial crisis that can fall on us if this lasts long,” he warns.
“The objective is to be able to open in spring: with another blank season we would collapse”, admits RosellÃ³ bluntly. The real danger, he warns, lies in the fact that the health crisis continues longer than expected. All the gear of aids and mechanisms to keep companies and workers afloat, he assures, would become a double-edged sword and the entire system with which it has been possible to maintain all the fabric would collapse.
“THE SITUATION IS DELICATE”
“All the measures that have been applied were based on the fact that they would not have to be delayed in time. An assistance policy has been carried out to cauterize the wound thinking that this would not last long”, explains the vice president of CAEB in Ibiza. “The situation is delicate because the SURE funds – the European fund from which the ERTEs draw – are exhausted and all the aid is loans that have to be repaid. That can end up being a noose around the neck for the businessman “.
Requests for “clear aid” from the business sector – “There has been no clear support beyond those of the ICO” – focus on the fiscal aspect, rationing of fiscal pressure ranging from the autonomous to municipal level . The requests that CAEB sent by letter months ago to the Balearic city councils requesting reductions in municipal taxes and fees have been attended to at least in some consistories, such as those of Sant Josep de Sa Talaia or Santa EulÃ ria des Riu, with reductions in the rate of garbage the application of the minimum tax rate of 0.4% in the Real Estate Tax (IBI).
Still, there is concern but also confidence in an improvement. The general opinion – and hope – is that Although 2021 is not going to be a year to shoot rockets better than 2020, it will be. Necessarily. Advances in health responses and in the policies with which they must be implemented -vaccines, application of PCR tests to travelers, etc.- has permeated the atmosphere with a certain optimism that is already evident in international stock exchanges. “We have three or four months of margin to work and I think we can be moderately optimistic.”
I am Derek Black, an author of World Stock Market. I have a degree in creative writing and journalism from the University of Central Florida. I have a passion for writing and informing the public. I strive to be accurate and fair in my reporting, and to provide a voice for those who may not otherwise be heard.