Palma keeps its hotel industry in top shape. The Balearic capital has closed out the summer season with an occupancy rate of 89 percent, virtually on par with the 90 percent recorded in 2025, but in a market context characterized by rising revenue per room, more demanding clientele, and new operational challenges. Among these, one stands out above the rest: housing access, which threatens to make it difficult to hire professionals in one of the city’s main economic drivers.
The figures from June to September are positive for the Palma Hotel Association. According to data presented Wednesday by its director, Mercè Peñaranda, cost per room has increased by 8.9 percent, while spending per room has grown by 8.3 percent. This trend is occurring amid shorter tourist stays and guests booking with less advance notice, a trend that is forcing establishments to perfect their commercial and operational strategies.
The president of the business association, Francisco Serrano, has emphasized that visitors are becoming increasingly demanding and critical. Therefore, competitiveness in the hotel industry depends not only on maintaining high occupancy rates but also on meeting growing expectations regarding service, experience, and quality.
In this context, the human factor remains one of the sector’s key assets. Serrano highlighted the average score of 9.46 achieved by the staff of the 83 hotels that make up the association. “We are proud of it, because the human factor is our most important asset,” he said.
Accommodation becomes part of hotels’ business strategy
The difficulty of accessing housing has become one of the main obstacles for the hotel industry in the Balearic Islands. Beyond its social implications, the problem has direct consequences for companies’ ability to attract staff, fill vacancies, and maintain operations during the peak demand months.
Faced with this situation, companies in Palma have begun to implement their own solutions. Some hotels have reserved accommodations for their staff, while others are offering direct rent assistance. These measures are designed to alleviate a problem that affects both residents and workers who come to the island to work during the tourist season.
Serrano has emphasized the need to make ‘bold decisions’ to address the housing problem and has warned that difficulties in finding housing are hindering the hiring of staff. The situation is especially significant for a sector that needs to combine flexibility during peak activity periods with stability within its teams. According to the association’s president, one of Palma’s competitive advantages lies precisely in the fact that its hotels remain open year-round, which allows them to offer stable employment and lower staff turnover.
However, temporary staff and substitutes for sick employees continue to be one of the main sources of operational difficulties. On top of that is absenteeism: figures from the employers’ organization show peaks of nearly 30 percent in certain establishments during the high season, compared with an annual average of 14.8 percent, as Peñaranda explains.
The combination of unaffordable housing, hiring difficulties, and staff absenteeism makes talent management one of the strategic priorities for the hospitality sector in Palma. Maintaining service quality requires not only investment in facilities and products but also conditions that allow the sector to attract and retain professionals.
New connections to expand international reach
Palma’s strategy also involves diversifying its source markets and strengthening its air connections. Among the highlights announced by the association is a direct connection to New York, which will begin in March, along with new routes to Montreal and Abu Dhabi. For Serrano, these routes represent an opportunity to expand the destination’s international reach without displacing traditional markets. “The goal is not to replace traditional markets, but to complement them in a balanced way,” he said.
Opening up to new markets can help strengthen Palma’s international position and expand commercial opportunities for its businesses. The challenge, however, lies in turning this connectivity into year-round demand that adds value, rather than only during the busiest months.
Winter: a task still to be completed
Seasonal adjustment remains one of the sector’s key objectives. Although there are establishments in Palma that operate year-round, business levels drop significantly during the winter months.
According to figures provided by Serrano, occupancy stands at around 50 percent in November, while average activity falls between 30 and 35 percent during the January to March quarter. The business association wants to take advantage of this period to boost demand through events and activities aimed at the local public. The initiative aims to ensure that residents also enjoy the city’s facilities and hotel accommodations, extending their use beyond international visitors.
This strategy would allow access to new sources of demand during the quieter months, while also helping to maintain employment and make better use of existing infrastructure.
The season’s results paint a mixed picture. On one hand, Palma maintains high occupancy rates and records increases in rate and revenue per room – signs of strength in a well-established tourism market. On the other hand, shorter stays, more demanding guests, difficulties hiring staff, and a decline in winter activity highlight the limitations of a model that must continue to evolve.
The next phase of Palma’s hospitality sector will depend, to a large extent, on its ability to find a balance between these factors: expanding into international markets, maintaining quality standards, ensuring access to talent, and generating business beyond the high season.
With a summer occupancy rate of 89 percent, the challenge facing Palma is no longer just filling rooms. It also involves establishing a competitive year-round hotel model capable of generating economic value while staying connected to the living conditions of those who make its operation possible.
