The case describes the story of Meliá Hotels International in Magaluf, Mallorca, as a touristic destination that had an extraordinarily fast development. It became a reference destination, due to its climate and privileged environment. It turned into a reference of quality and cost-effectiveness in Spain for decades, driven by hotel investment and tourism in the area.
However, in the 90s the perception of the area, as a quality tourist destination, decreased and began a period of inflection. These actions led to the fall of prices and margins of hotels.
Faced with the situation of serious deterioration of the Magaluf area and the declining results of Meliá hotels in the area, Mark Hoddinott knew that they had to make a strategic decision about the positioning of Meliá in that destination. After detailed analyzes, reflections and a wide network of consultations with collaborators, Hoddinott concluded that the best alternative for the company was investing in the area and promoting a strategic repositioning to restart Magaluf as a tourist destination.