Port de Soller fringes a perfectly formed natural harbour, encompassing 300 degrees with a narrow harbour entrance guarded by lighthouses on either headland and affording a perfect marina location. As such, it’s the first stop for yachts from Barcelona - money is coming to town.

Along the front, the Diablito lounge with it’s zebra-striped sofas is this summer's fashionable bar. Café Pacific, just off the front, is another ice-cool bar across the road from the throroughly revamped Hotel Aimia. But this is not a raucous resort - there is only one nightclub.

Of the several restaurants along the waterfront, many are of the resort variety. Randemar was very good, although I wished we'd had the chance to try the highly recommended Es Canyis - it was shut both nights we were there. For lunch, the must-eat place is the fish restaurant at El Faro, high up by one of the lighthouses.

But the big news in town is that Port de Soller will be firmly put on the map with the opening of Spain’s first seven-star hotel in two years. The Dubai-based Jumeirah group, which runs the iconic Burj al-Arab, is to run the hotel on the headland overlooking the port. "Maybe we will be the Mallocan Santorini,” said a friend living on the island.

The spurt of development has been partly prompted by the desire to update an ageing resort infrastructure and freshen up for the next generation. The revamp has been hugely aided by a tunnel blasted through the mountains last year which irrevocably altered the character of Soller.

Instead of a tortuous road around the mountain, it is now a 40-minute drive from Palma airport into the orange and olive grove valley of Soller and Port de Soller. Not only that, the rerouting means that this summer, for the first time, cars only have one-way access along the front in Port de Soller. The restaurants and bars have taken advantage to extend their terraces and decking towards beach.

The passaeo is again an enjoyable early evening pursuit, the waterfront full of ambling couples, many on their first-holiday-with-the-baby. We took a 20 minute stroll and only two cars and a bike passed us.

Freed from choking traffic, the age-old tram now trundles proudly in isolation along the front, linking Port de Soller with Soller a mile inland, where two new townhouse hotels have opened in the past year. From the port to the railway station in Soller, it is a 15-minute journey. At Soller station, the train from Palma pulls in, disgorging 200 passengers, mostly German and all daytrippers from Palma.

It’s the end of the line, and the process of switching the engine around is worth spending 30 minutes in the splendid and beautifully high windowed station bar. There's even a permanent exhibition of Miro paintings and Picasso ceramics off the lobby.

Agrotourism is still strong in these parts, the renovation of farm buildings providing accommodation. The income has seen wine production resume in the valley and the development of food routes – wine, olive oil, cheeses. We drove through orchards and groves on the short drive along a winding coast road to Deia, a village whose visitors have included the poet Robert Graves, Richard Branson (he owned La Residencia) and Michael Douglas.

What Deia does have is a choice of several restaurants, some austere, some with terraces affording great views down the valley. There are 10 places to eat in a 100 metre stretch of the narrow road that runs through the village.

Jaume’s restaurant, which serves Mallorcan cuisine, looked “reassuringly expensive” said my wife, with fillet steaks at £17. Sa Vinya and Sa Dorado (£10 for fish) looked better bets. We chose another spot for lunch, Xelini, which has a tremendous tapas selection and terrace with eight tables raised above and across the road from restaurant row.

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