Noel Grima

As this summer’s tourist figures head seriously south, and as Friday’s deadline for low cost airlines looms near with no queue outside the door, and as many in the tourism sector feel the pinch (of lack of business and of the banks on the other side), as well as calls for the sacking of Minister Francis Zammit Dimech multiply, every item of news and rumours regarding this sector has started to take on something of a Carry On tinge.

Tourism, long the mainstay of the country’s economy, has suddenly become the national laughing stock.

The latest rumour (and perhaps more than just a rumour) is that a group of well-known entrepreneurs in the tourism sector – the Decesare brothers, Winston Zahra, Michael Zammit Tabona, Joe Preca, George Fenech and the like – have been invited by Dr Zammit Dimech to form part of his consultative committee.

This has set tongues wagging: is this the minister’s strategy to avoid sinking, by getting all his vociferous critics around the same table? Or is it a strategy to cut down MTA to doing backroom work, such as enforcement or product development?

Or is it another strategy whereby the five-star owners get into a position of decision-making equal to the one from where they had been unceremoniously eased out at the latest MTA board change, to the detriment, or perceived detriment, of the bulk of tourism operators, that is, the owners of three- and four-star hotels?

The tourism sector is in deep trouble, admitted even by the government’s own pre-budget document. Where there should have been a 45,000 tourists increase, there may be, according to a hotelier, even a 40,000 tourists decrease, a total loss of some Lm89 million to the Maltese economy.

While competitor venues around the Mediterranean are experiencing a more or less consistent increase, Malta has seen its tourism appeal fall through the floor.

There is nothing mysterious or unpredictable about this: Malta’s cost base is too high, and getting higher, the country itself has a myriad well-identified flaws, which put people off (and which have not been addressed), and access to Malta through the established airlines is simply not enough to fill up the existing bed stock on the island.

While the symptoms have long been identified, and the cure suggested, what has been done in contrast, hardly follows from the symptoms analysis and the oft-repeated suggestions.

To take a long view: this could be another example of something that periodically blights Malta: the biggest changes occur not when governments change, but when ministers are changed, even within the same government. The old team is seen off, with some loud or muted criticism, and the new team comes in and starts to do everything from scratch.

Then the inevitable happens.

Take the low cost airlines saga. The operators in the tourism sector have long been clamouring for the introduction of low cost carriers but the government is deeply split on this issue, since it does not want to be perceived as the one that kills off Air Malta.

There is a deadline, set for next Friday, for low cost airlines to apply for some specific routes – Belfast, Luton, Pisa, Spain – but many in the industry tell you they doubt whether any will apply and it is anyway too late: the winter season is already planned.

Others still say they are convinced that low cost airlines will come, sooner or later, and getting them later rather than sooner will not make things any better.

If it’s any consolation, it is that a Labour government would find itself split along the same lines were it to be in government now, for much the same reasons, the defence of Air Malta.

But beyond the low cost airlines saga, it is what has happened within and around MTA that makes the sorriest reading.

The 2004 Deloitte report on MTA is particularly scathing: “The MTA’s Second Strategic Plan has not really delivered as it had no specific measurable targets, no clearly mapped out action plan, no ownership and little input from the private sector, resulting in what has been dismissed by many as a public relations report and not a strategy.”

MTA “has increasingly started involving itself in areas relating to ‘Product Malta’ that should be outsourced or left to other agencies as opposed to facilitating and co-ordinating overall product issues (eg beach cleaning, St George’s Bay beach regeneration, certain events and festivals, tourist information services). It therefore started getting lost in the operational detail of these tasks as opposed to its core ‘macro’ responsibilities, while at the same time increasing its cost base and manpower to cope with this increased workload.”

The report is scathing about the involvement of the private sector. “The intention of the legislators when setting up the MTA was to involve the private sector in the running of the MTA by giving them strong representation on the various boards. In theory, this should have been a very effective tool and should have allowed the private sector to significantly influence the course of events. However, this laudable objective was not achieved because the directorate boards were too part-time in nature and often got excessively involved in mundane administrative issues instead of strategic issues. In addition, certain board members were not fully committed to the MTA as a whole.”

While the industry is highly critical of MTA’s marketing and promotion effort – lack of focus and depth, no clear branding policy, inconsistency over time and across markets, insufficient segmental marketing and too little co-branded advertising or partnership marketing, hence a bias towards expensive consumer advertising and direct tour operator support schemes – Deloitte noticed no formal measurement of spend v results/effectiveness, no centralised outbound market intelligence and MTA’s chosen campaigns were sometimes considered to be downmarket by the overseas tour operators themselves.

Yet, while internationally, similar organisations spend 70 per cent of their total cost base on marketing and promotions, MTA spends just 58 per cent. In 2003 it spent less than it spent in 2000. Yet in 2000 MTA was spending 80 per cent of its total expenditure on marketing and promotions while this decreased to 70 per cent in 2003. Meanwhile, it kept employing more staff (240 in 2003, and 75 per cent of them felt that internal communication was weak) and total payroll costs increased by 60 per cent between 2000 and 2003.

Nowhere, perhaps, has the confusion reigned supreme as it has over the choice, and then termination of Romwald Lungaro-Mifsud as MTA chairman. Contrary to government practice, Mr Lungaro-Mifsud was appointed as both chairman and CEO. One of his first decisions involved getting everyone at MTA into a uniform.

Then, following a series of leaks and barely concealed anger by the private sector, Mr Lungaro-Mifsud announced on 28 July that he had resigned as his “mission” was “accomplished”.

Mr Lungaro-Mifsud is still at MTA, as his time there comes to an end on 31 August, and still running the show, despite the fact that the new chairman, and now even the CEO, have already been chosen.

And when Dr Zammit Dimech admitted to an MHRA delegation last week that Mr Lungaro-Mifsud will continue to pick up his Lm25,000 a year salary till his contract runs out at the end of March, and will still enjoy his car and mobile phone, vituperative comments by the industry reached rarely achieved levels, leading to calls for the minister’s resignation after the minister reportedly said the added expense would not break anybody’s back, at a time of general austerity all around.

One of the “missions” that was “accomplished”, other than the advertising spend on CNN seen in countries, many of which have no direct connection to Malta, was the famous and expensive Brand Malta exercise, which has become a national laughing stock and has not served one whit to make Malta any better for incoming tourists. Once again, the failure of this exercise shows the faults that have bedevilled MTA and its predecessor NTOM: high spend on consumer advertising, little follow-up and even less, achieving results at ground level.

It is a measure of the desperation at the top, a tourism entrepreneur told this newspaper: in times of trouble, the last card to play is to get everyone on the bridge, so that all are accountable and none are responsible.