Hotel reservations for July, August and September have dropped so much that discounts of up to 40 per cent are being offered to tempt holidaymakers.
Businesses involved in hotels, catering, transportation and associated services say their profits are already down in contrast to the boom times of 2017.
Gabriel Llobera, member of the board of directors of the Association of Hotel Chains of the Balearic Islands, told Spanish newspaper Ultimahora.es: "Business profitability will fall compared to 2017 but not as much as hotel occupancy.
"The strong competition from Turkey, Egypt and Greece, as well as the prices we have in the islands, are the main causes. To this we must add the impact of the ecotax."
The group says there are hotels on the islands which have so few bookings in the coming months that they are making "all sorts of offers and discounts," reaching up to 40 per cent in some cases.
Gabriel said: "The situation is very different from the one in 2017, which we can describe as the record year. From now on, we will have to get used to this new commercial dynamic in the Mediterranean."
The hotel management of Majorca FEHM is blaming the decline in occupancy on the recovery of competing countries and the increase in accommodation places for holiday rentals.
They say the loss of German and British tourists will lead to a drop in income but this will need to be filled by alternative markets, particularly domestic tourism from the Spanish mainland.
President Maria Frontera confirmed: "This is a very different situation from previous years.
"We can speak of an atypical season due to the confluence of multiple factors that will change the expected results, with a clear downward trend.
"The evolution of German and British tourism is lower than last year."
President of the Balearic Business Federation of Transport, Rafael Roig, confirmed to Ultimahora.es : "The volume of business registers an average decrease of between ten and 15 per cent with respect to 2017. "
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