More revenue, fewer Germans: Who really benefits from the Balearic boom?

More money in the till, but not for everyone: the new tourism bill

On the Paseo Marítimo the clatter of dishes has been louder again for weeks. On the terraces international voices sit out early in the morning, waiters push trolleys with gleaming bottles along. The hotels display freshly painted entrances, and in some places even new, subtle design lighting flickers — a visible sign of increased turnover. An industry report confirms: the Balearic Islands recorded significantly higher hotel revenues in 2025, as noted in Balearic Islands on the Rise – More Visitors, Fewer Germans: How Mallorca Can Manage the Transition, and regional figures are also reflected in the UNWTO tourism dashboard.

The key question: Who really benefits from rising revenues?

At first glance the answer is simple: the establishments belonging to large chains, the renovated suites and those with sharply raised price lists. Average revenue per room has increased, and on Ibiza and Formentera there were occasional peak values of over €200 per room. But the real question is more complex: does this additional money flow into the local economy — or does it remain with owners, management companies and large suppliers?

Fewer Germans, more variety — and new consequences

Interestingly, slightly fewer guests from Germany arrived this summer: a decrease of around 4.4 percent. Not dramatic, but noticeable in places with decades of regular German clientele. Other markets have compensated for the shortfall — more British visitors, some guests from Asia and niche markets with higher expectations. The result: higher prices, but a different guest mix. Those who used to seek small, family-run charm now encounter international luxury standards more often.

The local distribution gap

At the weekly market in Inca a stallholder says, 'People prefer to drink expensive cocktails at the harbor rather than have a café con leche with us.' This is not an isolated case. Small guesthouses, market stalls, craft shops or inexpensive bars feel the shift: more turnover does not automatically mean more foot traffic for low-price offers. At the same time, higher room prices often push up ancillary local costs — rents, wages and supply prices climb.

Often overlooked aspects

1) Ecological costs: higher utilization of selected segments increases EEA water scarcity and droughts, seasonal strain on water, wastewater and traffic, without infrastructure growing proportionally. 2) Labor market: demand shifts toward skilled service staff — yet not all jobs are long-term or fairly paid. 3) Real estate market: investors who invest in upgrades drive up prices in desirable neighborhoods; this affects rental housing for locals.

Concrete opportunities and approaches

The islands can use this phase — but only if political and economic decisions take into account who lives on the islands, not just who visits. Some proposals:

Redistribution of tourist funds: A portion of increased hotel levies should be earmarked to support small businesses and market stalls — for example via microloans or grants for digitalization.

Promoting mixed guest markets: Marketing campaigns that also target middle-class and cultural tourism instead of only promoting luxury segments. Securing more direct flights from traditional markets to ensure stability.

Strengthening infrastructure: Investments in water treatment, public transport and seasonal waste disposal must proceed in parallel with hotel expansion plans.

Training and fair wages: Incentives for further training in hospitality and catering as well as minimum standards in employment contracts ensure that additional revenues also reach employees, an issue discussed in local commentary such as When the Germans Stay Away: Opportunity or Risk for Mallorca?.

An outlook with local color

On Mallorca you hear it on rainy October mornings: the loud rattling of a small cleaning truck, the lapping of brown-green sea at Playa de Palma and the conversation of two older women at the market about the new bar at the harbor. Whether these changes are permanent depends on many factors — demand, flight connections and, yes, even the next change in the weather. One thing is clear: more revenue is an opportunity. But without targeted policy and local strategies, the gap between shiny hotel lobbies and empty market stalls risks widening further.

For Mallorca and the other islands this means: smile not only at the reception, but get to work at the grassroots — so that profits do not just shine, but also arrive where they are needed.