Are all-inclusive holidays creating ghost towns?

By Rajan Datar
Presenter, BBC Fast Track

The island of Majorca is the birthplace of that phenomenon of mass tourism, the all-inclusive resort, which is making a controversial comeback to the dismay of local businesses and restaurants.

The very nature of the all-inclusive holiday means guests are tempted to stay within the grounds of the resort and not venture out to explore the rest of the island.

After 11 years running the Don Pedro restaurant in the Majorcan resort town of Alcudia, Francisco Baeza Saez says the surge of all-inclusives, coming on top of the economic downturn, has all but crushed his business.

The destiny of local communities shouldn't be left to profit-driven companies Pelin Bardacki, Tourism Concern

"I'm not the only one. In Majorca there are lots of restaurants, here, we have the entire street. It used to be called the street of the dollar - it is now called the street of the penny. And it is because of the all-inclusive.

"The hotel is keeping people inside and they don't go out. Every single business on this street is really down. And we're going to have to close one after the other," he said.

Between 2000 and 2008 business was good, Francisco said, but the number of all-inclusive tourists then rose dramatically, coinciding with the global recession.

Local businesses are planning to close down for a day in September in protest, to show that if the all-inclusive trend continues down the logical route, Majorca's towns will become ghost towns.

High demand

THE HYND FAMILY From Edinburgh, Scotland - on their fourth all-inclusive holiday Parents Cheryl and Neil love the fact that it is safe and they know what they have paid for They do bring extra spending money but hardly venture outside the resort Boys Liam and Luke love the activities and their days are planned for them

First Choice, which is owned by TUI Travel, recently announced that from next year all its holidays will be all-inclusive after demand rose by a third in just five years.

Three years ago just two out of five First Choice holidays were all-inclusive, this year they account for 65%.

The reason given is people, in these stringent economic times, want the reassurance of knowing how much they will need to pay before they leave.

Flights, transfers, meals and drinks are usually supplied in the all-inclusive package.

Mass tourism like this may not be to everyone's liking but many of the 1200 British customers at Holiday Village, the flagship First Choice resort on Majorca, love the concept.

Unwise words

But not everyone is cashing in and, in the words of the marketing men, the notion of "leaving your wallet at home" doesn't sit well with local restaurateurs.

The phrase was coined by Johan Lundgren, the UK and Ireland managing director of TUI, but has now been disowned.

"It was a PR phrase that we used. We don't advertise on that basis. If that's a phrase that we've used before then perhaps that doesn't help with the local area and we need to be mindful of that," said Christian Cull, director of communications for TUI UK and Ireland.

But studies show the rising numbers of all-inclusive tourists do spend far less on local services and businesses than any other category of tourist - which leaves local communities vulnerable, say critics.

A study in Turkey, funded by the tourism industry and conducted at a First Choice resort, found that just 10% of spend by all-inclusive tourists found its way into the regional economy.

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"We believe that to make all-inclusive more sustainable we should level the playing field and give power to the local communities. The destiny of local communities shouldn't be left to profit-driven companies," said Pelin Bardacki, of Tourism Concern.

Ms Bardacki said Tourism Concern is worried about the low wages the package companies pay local staff.

She added that local farmers also get a raw deal because they are treated in the same way as big suppliers and only get paid every six months by the holiday companies - which makes it very difficult to operate.

The big companies have immense leverage as they employ so many people and bring in so many tourists - and if they are not happy they will move their resort elsewhere.

Ms Bardacki would like to see regional governments imposing rules and incentives that would encourage business partnerships with local entrepreneurs.

Like many destinations 80% of Majorca's economy is dependent on tourism and that puts the major package companies in a very powerful position.

Heated row

Back in 1950, the first all-inclusive holiday was created in Alcudia by the French company Club Med. It was a not-for-profit venture that saw 200 tents pitched up on a beach with pit toilets.

But the concept really took off in the 1980s and 1990s in the Caribbean. In the early days many of these resorts were also criticised for excluding the local community from sharing in the spending power of cocooned tourists.

In recent years, prompted in part by local tourist boards, many resorts in the Caribbean and Africa have introduced more community-oriented events and excursions.

The solution for me is that they have to regulate the all-inclusive - it's not only the business of one tour operator or one hotel, it's the business of a whole area Francisco Baeza Saez

The rise of low cost airlines and the internet has meant that travellers have an increased choice of flights and destinations which they can arrange and independently customise.

The reputation of all-inclusive holidays was also damaged by issues of poor quality and concern that tourists were insulated from the rest of the local culture and economy. Now the big brands are fighting back by offering increasingly good deals.

With First Choice rolling out its dedicated all-inclusive plan around the world next year to its 34 destinations, the row around this issue is set to become even more heated.

Thomas Cook is reported to be increasing its number of all-inclusive holidays by 10% by next year and interestingly also rolling out a project which would include neighbouring bars and restaurants.

And the concept is spreading around the world with China already host to one all-inclusive Club Med, with more in the pipeline.

But brands like First Choice insist they are concerned about sustainability and local communities. First Choice organises excursions to local areas and employs local entertainers - but also accepts that it doesn't do enough.

"We have responsibility in every hotel, with every hotel supplier that we work with, in every community that we find ourselves in. We want to be there for the long term, not just for the fast buck," said Christian Cull.

Little consolation in the short term though for the likes of Francisco - he can't afford taxes, wages or rent, he has already had to lay off half his staff and now he is resigned to closing his beloved restaurant.

"The solution for me is that they have to regulate the all-inclusive. Because it's not only the business of one tour operator or one hotel, it's the business of a whole area. If all-inclusives were limited to 40% of tourists, we could all live well."