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The Spanish Parador as a paradigm — an alternative view
Viewpoint Contributions to Viewpoint are welcomed: they should conform to International Journal of HosDitalitv Manaaement stvle (see Notes for Contributors) and be of not more than 1500 words in lengih. Vikwpoin; are not ;efe;eed.
local residents than the overnight customers who. if tourists, are more likely to visit local sights of interest or, if business people, will be too busy to use them. Thus the managers of Paradores are often operating under difficult economic constraints that were deliberately built into their operations at the start.
The Spanish Parador as a paradigm an alternative view Keith Allwood Norwich City College, Norwich, U.K.
However, this is not all: as ‘semi-public enterprises’ they are controlled by a central administration based in Madrid. This administration is itself subject to the particular constraints of whatever government social and economic policies are currently in force.
The Spanish Parador has been the object of some interest in Britain in recent months where it was cited in an editorial in the London Sunday Times (March 1985) as a model that should be adopted by the stately homes of England, and commended to Lord Young as a scheme that he should consider as part of the current Government study of tourism and leisure in Britain. Before rushing to adopt such a model, however, it may be worth reflecting on the original purpose of the Paradores in Spain as well as the considerable organisational and marketing problems that they face.
For example, wage rates for Parador employees are determined through central collective bargaining in Madrid and there is some feeling among managers that political considerations wider than those arising from within the organisation can often influence the agreements reached. Perhaps a more significant factor is the conflict between government social and employment policy on the one hand and narrower business criteria on the other when it comes to determining the number of staff in any one Parador. One inside source reports that the effect of this has meant that at least one Parador has double the number of staff that would be found in a comparable commercial hotel and that manpower costs in Paradores overall have risen from 35 to 60% of total operating budgets. Difficulties in controlling staff budgets have been exacerbated by recent legislation in Spain which has increased redundancy pay whilst shortening the qualifying period-this has discouraged employers from taking on temporary and part-time staff and thus reduced managers’ flexibility in controlling overall wage-costs. (Legal minima for redundancy pay in Spain are around three times higher than those in the U.K.)
The conversion of stately homes and castles into hotels offering overnight accommodation and food began in Spain in 1928 but really accelerated during the 1960s and 1970s: in March 1985 there were 85 (some of them new buildings), all run as a Government-controlled chain under the Secretariat of State for Tourism. It is the role of the Spanish Government in the establishment of Paradores that is the key to understanding the situation they find themselves in today. Many were opened for reasons of social and economic policy rather than as short-term investment propositions. Many were opened in centres away from established tourist routes as a means of encouraging economic development in the surrounding area and were therefore sited in places where private entrepreneurs could not or would not have started a hotel business. Others were designed primarily to provide a model for local hoteliers to see what was possible in hotel provision and thus to widen the horizons of the existing hotel industry. This means that some have a range of ancillary services (such as swimming pools and sports facilities) that are more likely to be used by Int.J. Hospitality
Management Printed in Great Britain
With wage-costs forming such a large percentage of operating costs it is thus extremely difficult for the managers of individual operations to prepare budget forecasts - especially as the annual wage round takes place six months into the financial year! The political
nature of the central administration 0278-4319/86 $3.00 + 0.00 Pergamon Journals Ltd
Vol. 5 No. 2 pp. 93-94
93
94
in Madrid reportedly causes particular difficulties in Parador management. With the job-span of the Director of Paradores somewhat shorter than that of the average British Cabinet Minister (there have been six in the last five years) continuity of policy is not all that it might be, especially as these are political appointees who have little or no background in the professional management of hotel operations. Prices are fixed centrally and there is little or no flexibility for local managers to vary prices according to conditions (any special price arrangements must be authorised by the central bureaucracy in Madrid) and thus private tour operators are able to undercut Paradores by making special arrangements with hotels in the private sector. Managers are set (negotiable) budget and sales objectives by Madrid, but there are no incentive payments to management or staff according to performance. Each operation has two budgets: one for capital expenditure that is controlled and approved from Madrid, and one for consumable materials that is controlled by the local manager. Until recently, promotion within the Parador system was by length of service, rather than by performance, but this is changing.
Viewpoint
As if this unwieldy administrative structure were not handicap enough there are particular marketing problems arising from the way in which the Parador system has developed over the years. It is now made up of a wide variety of units, each catering for different tastes and interests - some are close to major cities and are of interest mainly to business people, some (Refugios) are in remote areas and cater for hunters and fishers: thus the personality of each unit is very different. They also vary tremendously in size and number of rooms: one has 300 rooms, another has 6! Such variety in size and style makes it extremely difficult to market them as a homogeneous entity - their major link is the administrative system that binds them together and this is of little interest to prospective customers, especially tour operators who need to be able to book standard party numbers into a series of hotels. Central policy has now determined that new Paradores must have a minimum of 60 rooms to generate sufficient income to remain profitable. Thus whilst the notion of changing the stately homes of England into a series of luxury hotels has some appeal I feel we should hesitate before adopting the Parador as a paradigm.
local residents than the overnight customers who. if tourists, are more likely to visit local sights of interest or, if business people, will be too busy to use them. Thus the managers of Paradores are often operating under difficult economic constraints that were deliberately built into their operations at the start.
The Spanish Parador as a paradigm an alternative view Keith Allwood Norwich City College, Norwich, U.K.
However, this is not all: as ‘semi-public enterprises’ they are controlled by a central administration based in Madrid. This administration is itself subject to the particular constraints of whatever government social and economic policies are currently in force.
The Spanish Parador has been the object of some interest in Britain in recent months where it was cited in an editorial in the London Sunday Times (March 1985) as a model that should be adopted by the stately homes of England, and commended to Lord Young as a scheme that he should consider as part of the current Government study of tourism and leisure in Britain. Before rushing to adopt such a model, however, it may be worth reflecting on the original purpose of the Paradores in Spain as well as the considerable organisational and marketing problems that they face.
For example, wage rates for Parador employees are determined through central collective bargaining in Madrid and there is some feeling among managers that political considerations wider than those arising from within the organisation can often influence the agreements reached. Perhaps a more significant factor is the conflict between government social and employment policy on the one hand and narrower business criteria on the other when it comes to determining the number of staff in any one Parador. One inside source reports that the effect of this has meant that at least one Parador has double the number of staff that would be found in a comparable commercial hotel and that manpower costs in Paradores overall have risen from 35 to 60% of total operating budgets. Difficulties in controlling staff budgets have been exacerbated by recent legislation in Spain which has increased redundancy pay whilst shortening the qualifying period-this has discouraged employers from taking on temporary and part-time staff and thus reduced managers’ flexibility in controlling overall wage-costs. (Legal minima for redundancy pay in Spain are around three times higher than those in the U.K.)
The conversion of stately homes and castles into hotels offering overnight accommodation and food began in Spain in 1928 but really accelerated during the 1960s and 1970s: in March 1985 there were 85 (some of them new buildings), all run as a Government-controlled chain under the Secretariat of State for Tourism. It is the role of the Spanish Government in the establishment of Paradores that is the key to understanding the situation they find themselves in today. Many were opened for reasons of social and economic policy rather than as short-term investment propositions. Many were opened in centres away from established tourist routes as a means of encouraging economic development in the surrounding area and were therefore sited in places where private entrepreneurs could not or would not have started a hotel business. Others were designed primarily to provide a model for local hoteliers to see what was possible in hotel provision and thus to widen the horizons of the existing hotel industry. This means that some have a range of ancillary services (such as swimming pools and sports facilities) that are more likely to be used by Int.J. Hospitality
Management Printed in Great Britain
With wage-costs forming such a large percentage of operating costs it is thus extremely difficult for the managers of individual operations to prepare budget forecasts - especially as the annual wage round takes place six months into the financial year! The political
nature of the central administration 0278-4319/86 $3.00 + 0.00 Pergamon Journals Ltd
Vol. 5 No. 2 pp. 93-94
93
94
in Madrid reportedly causes particular difficulties in Parador management. With the job-span of the Director of Paradores somewhat shorter than that of the average British Cabinet Minister (there have been six in the last five years) continuity of policy is not all that it might be, especially as these are political appointees who have little or no background in the professional management of hotel operations. Prices are fixed centrally and there is little or no flexibility for local managers to vary prices according to conditions (any special price arrangements must be authorised by the central bureaucracy in Madrid) and thus private tour operators are able to undercut Paradores by making special arrangements with hotels in the private sector. Managers are set (negotiable) budget and sales objectives by Madrid, but there are no incentive payments to management or staff according to performance. Each operation has two budgets: one for capital expenditure that is controlled and approved from Madrid, and one for consumable materials that is controlled by the local manager. Until recently, promotion within the Parador system was by length of service, rather than by performance, but this is changing.
Viewpoint
As if this unwieldy administrative structure were not handicap enough there are particular marketing problems arising from the way in which the Parador system has developed over the years. It is now made up of a wide variety of units, each catering for different tastes and interests - some are close to major cities and are of interest mainly to business people, some (Refugios) are in remote areas and cater for hunters and fishers: thus the personality of each unit is very different. They also vary tremendously in size and number of rooms: one has 300 rooms, another has 6! Such variety in size and style makes it extremely difficult to market them as a homogeneous entity - their major link is the administrative system that binds them together and this is of little interest to prospective customers, especially tour operators who need to be able to book standard party numbers into a series of hotels. Central policy has now determined that new Paradores must have a minimum of 60 rooms to generate sufficient income to remain profitable. Thus whilst the notion of changing the stately homes of England into a series of luxury hotels has some appeal I feel we should hesitate before adopting the Parador as a paradigm.