In a statement, FATTA said that Tourism Minister Francis Zammit Dimech rightly points out that tourism represents our country’s most important economic pillar. He claims to have been very emphatic over the past months that the Malta Tourism Authority (MTA) must ensure that it is an effective organisation that responds proactively to the new challenges that the industry has been facing.

This is what prompted the restructuring exercise at the MTA which was announced by Minister Zammit Dimech last week.

FATTA welcomes the restructuring exercise and hopes that this really will lead to desperately needed targets set by the minister: cost effectiveness, value for money, accountability, transparency, results-based performance and, most importantly, timely and effective reporting.

Indeed these should have always been the objectives of the MTA and resetting them now casts a justifiable shadow on the MTA’s operations to date.

FATTA is pleased to note that the choice of nominees on the strategy group charged with spearheading the restructuring exercise strongly indicates that there will be relevant consultation at both the analysis and recommendation stages of the exercise with the appropriate constituted bodies representing the stakeholders from the private sector.

The reference to an increase of eight per cent in tourist arrivals during the month of June, with slightly increased expenditure for the month, should be smothered by the worrying statistics also recently released by the National Statistics Office.

The industry is not really concerned with particular months, but with overall trends, and not with numbers of tourist arrivals (or departures) but with the economic contribution to the country. FATTA believes that the government should realign its yardstick in this direction, the federation said.

Tourism revenue

Tourism revenue during the first six months of this year is down, both on an absolute level as well as on a per capita level. On an absolute level, tourism expenditure is down by Lm 9.7 million (a drop of 5.5 per cent). The weighted average spend per capita is down by Lm10.80 per person (a drop of 5.8 per cet). The total number of nights spent is also down by 96,054 (a drop of two per cent) and the average number of nights per capita has dropped to 9.53 (a drop of 2.3 per cent).

These are the figures that really count to the economy, and this is what government and the MTA should be analysing and striving to improve, FATTA said.

In line with FATTA’s forecast earlier this year, cruise visitors are also in steep decline. The figures released by NSO for cruise visitors during the first six months show a decrease of 47,440 (a drop of 38 per cent). FATTA had warned the government and the MTA of an alarming drop in cruise visitors unless measures were taken to counter the loss of duty free benefit with improved competitiveness in Malta as a port of call.

Malta has the highest transit tax on cruise passengers among neighbouring and competing ports of call – even higher than Civitavecchia (Rome) and Naples. Although, at the time, strong attempts were made to discredit FATTA’s predictions, actual figures now prove that FATTA’s concerns were justified. The drop is all the more significant considering the overall increase in cruising capacity in the Mediterranean and also considering the substantial financial commitment MTA made to attract a cruise operator to use Malta as a “home port”.

Malta’s declining competitiveness in tourism services is not limited to the cruise call sector. This year has seen a number of government-induced hikes in the cost of tourism services.

Among these are the 75 per cent increase in the cost of entrance fees to Heritage Malta sites, the 14 per cent increase in passenger fares for the ferry crossing to Gozo, the three per cent increase in the rate of VAT and the substantial increase in the cost of diesel fuel. With the exception of Heritage Malta sites, none of these increases have been matched with any improvement in the services delivered.

New levy?

The latest threat of another blow to Malta’s competitiveness comes from Malta International Airport (MIA), which is planning to introduce a levy on tourism transportation services (coaches, minibuses and chauffeur driven cars) for entering the airport precincts.

FATTA calls on the Tourism and Culture Minister to intervene with the Competitiveness and Communications Minister on behalf of the industry to block this initiative which is not only detrimental to the tourism industry’s competitiveness (and to a number of small businesses and self-employed), but is also arguably an abuse of dominant position by MIA.

In any case, such a levy can never be justified unless it is matched with a drastic improvement in the organisation of the airport car park. To date, all arriving tourists are subject to the elements of the weather (be it extreme sunshine or heavy rain) to get from the terminal building to their transportation vehicle. FATTA has long been lobbying unsuccessfully with the MIA for a permanently covered walkway from the terminal to the parking bays.

It is indeed about time that one and all realise that competitiveness is not only determined by price but also by value for money. Increased charges for any service must always be met with an improvement in the quality levels of that service.

FATTA concurs with the Gozo Tourism Association and the Gozo Business Chamber that the Gozo ferry service has not improved despite the recent hike in fares. The non-chalance of Gozo Channel Company culminated in the ridiculous situation where the ferry service was suspended without prior notice for several hours on 24 July 2004.

Hundreds of tourists who were “would be” day trippers were left stranded on the Cirkewwa quay in scorching heat because the service was suspended due to a swimming event in the channel. It was Gozo Channel Company’s duty to advise its regular users well in advance of this suspension, FATTA said.

The result of its failure to give any notice at all has resulted in damages of several thousands of liri to local organised excursion operators, who are holding the Company responsible.

No solid action

During last year’s MTA annual conference, much pomp was put into the announcement of the MTA’s latest discovery – clusters. These turned out to be merely a re-definition of the more widely used marketing term – niches. The “identification” of clusters, or niches, was, in its vast majority, nothing more than an affirmation of the niche-marketing activities undertaken by the private sector for over a decade.

Although much lip service continues to be given to these niches, particularly to the conference & incentive travel and the special interest travel markets, this has not yet been translated into solid action. Both these divisions within the MTA continue to be under-funded and under-staffed while the general direction seems to continue towards marketing Malta as a mass destination. The fact that the government continues to measure tourism performance, at least publicly, simply with the “number of arrivals” yardstick is nothing but a confirmation of this anomaly.

The government’s failure to decide upon, and/or inform the industry of an alternative inter-island service to the replace the present helicopter service when this ceases operation in October 2004 is also creating uncertainty in the prospects for tourism to Gozo in the coming winter.

The delay in activating the scheme for structural funds from the EU for tourism related projects is another area where the Government seems to be dragging its feet to the detriment of the industry. New marketing initiatives by tourism operators are among projects that qualify to benefit from these funds on a 60/40 basis. Most marketing initiatives are being planned right now, but the scheme has yet to be released. This effectively means that we stand to lose out on exploiting these EU grants for practically another year, the federation said.

The release of these structural funds would only serve to further fuel the private sector’s investment in the promotion of Malta. This would, in turn, only contribute further to MTA’s (and indirectly the government’s) efforts to achieve the ultimate common objective – maximising the economic benefit that the tourism capacity can attract to the country.

In conclusion, FATTA recognises that the restructuring exercise at the MTA is certainly a gargantuan step in the right direction. However, in isolation this will not be the answer to the woes of the tourism industry. The core of the private sector has long been doing its bit and now, more than ever, needs the public sector to really understand the dynamics of the industry and to work towards the same goals. In this respect, the inter-ministerial committee needs to deliver more efficiently than it has been doing so far.