When Sam Mifsud took the helm of the Malta Tourism Authority just over a year ago, the sector had generally been considered to be in a state of crisis. Now 12 months down the road the industry is witnessing its best summer in six years. David Lindsay speaks with Mr Mifsud about the mechanics of the turnaround and the MTA’s efforts to secure the health of the industry after summer 2007

The state of Malta’s tourism industry by the end of last summer was nothing to write home about. Numbers were dwindling and the industry was reeling from what had widely been considered a disastrous branding campaign.

And in the lead up to summer 2007, prospects had seemed even bleaker. The Malta Tourism Authority and the industry at large were, late last spring, facing a very real threat of numbers plummeting by a further 20 percent this year.

But the cause of the fresh threat to one of the country’s main economic pillars did not derive from the perennially-present competition from other Mediterranean destinations or a global economic slowdown, but rather a simple and sudden change in tourists’ booking patterns.

Until perhaps this year, the tour operator business had been the bread and butter of Malta’s tourism industry. But consumer trends had taken a sudden turn in favour of direct bookings and by late April the local industry, faced with a 20 per cent drop in bookings, realised it had a real crisis on its hands.

By May, Air Malta was having problems, as were Malta’s hotels, and discussions the MTA had with hotel and travel agents associations confirmed the situation. Mitigating measures clearly had to be taken and the MTA burst into what chairman Sam Mifsud describes as a “full blast campaign” to win over the individual traveller and their emerging preference for shorter stays organised through direct bookings.

“We saw that crisis coming and we did something about it, which saved the end of June, July, August and September 2007,” Mr Mifsud explains.

The MTA had initially planned an international marketing campaign to run from the end of May to the end of June but, Mr Mifsud adds, once the reality of the new situation hit home, the campaign had to be pushed forward to the beginning of May – incurring an extra but unavoidable dent in the MTA’s budget.

“According to the figures we had,” he explains, “we knew the online and individual traveller – whether booking through websites such as Expedia.com or directly through a hotel or a low cost carrier like Ryanair – was increasing at a fast rate while the tour operator business was decreasing at an albeit slower rate.

“And since we had just introduced low cost airlines and their direct business concept here in Malta, we felt the impact much greater than before.”

Online bookings through the websites of low cost carriers plying the Malta routes, as well as established websites such as Expedia.com, were gaining in prominence in Malta’s core markets and that is exactly where the MTA refocused its attention in the lead-up to the crucial summer season.

As an example, the MTA targeted Expedia.com, the world’s leading online travel booking engine, to market destination Malta – leading Expedia.com to cite the MTA as “e-pioneers” on the grounds that it was the first national tourism organisation to have tapped the extremely valuable resource by marketing its destination directly through the website.

Malta is now averaging no less than 300 room night bookings per day through the website.

The new tendency for direct bookings is also bringing to Malta a different type of tourist – the late booking, shorter-stay tourist who decides on a holiday for a long weekend, for example, at the drop of a hat.

The trend represents a marked contrast with the traditional tourist that books their summer holiday in January. The new tourist is doing so just a week in advance, meaning the MTA’s advertising campaigns need to be something of a permanent fixture in the media in Malta’s core and developing markets.

But does the relatively new tourist segment leave behind the same type of expenditure? Mr Mifsud cites recent National Statistics Office figures, which have shown a considerable increase in expenditure levels this year.

“In my opinion, there are two reasons behind the increase in expenditure and its link with the shorter stay tourist. Firstly, the shorter stay tourists are perhaps better off and they spend, more or less, the same amount as those who spend a fortnight in Malta.

“What is also very important is that with the individual traveller we are bringing more money into the country. Through the more traditional tour operator-based business, the tour operator keeps a minimum of 20 to 25 per cent of the overall expenditure in their own country.

“But with direct bookings, the hotel and the airline both get better rates, the tourists have more money to spend when they are here and no one pays commissions to X, Y or Z.

“They book direct, they spend as much as they would have through an operator, but everything is going directly to the business that is actually providing the services.”

The new individual traveller trend also holds great potential in addressing the slow winter and shoulder months – which present a recurring problem of wasted capacity within Malta’s tourism sector.

Mr Mifsud is upbeat on current trends leading to future prospects for the colder months.

“Winter and the shoulder months are always winter and shoulder months, but we are quite confident that we can grow drastically in the low season through the new individual traveller focussed on shorter stays.

“We also now have the additional flight capacity available to deal with conference and incentives and the business traveller, who spend up to ten times as much as a traditional tourist, whereas before we didn’t.

“In fact, my first comments when I was appointed MTA chairman last September was that we needed to work for more flight capacity.

“Now that we have secured more capacity, we will also have to market Malta much more so as to realise the full potential of the additional capacity. We are also in constant contact with Air Malta, where we are even looking at the way they advertise and market Malta so that we are on the same wavelength.

“For example, Air Malta will no longer be operating routes once a week because that market does not work in the winter and the shoulder period. Air Malta has to operate a route a minimum of two to three times a week, aimed at the shorter stay tourist as that is our target market for the winter and shoulder months.

“But, having said that, we have to keep our feet on the ground. Since we are going for a shorter stay, the average length of stay has gone down so we need a lot more tourists to make up for that. We should still look at the numbers and overall bed nights, but we need a higher increase in overall numbers to make up for the shorter stay element.”

“Attracting a larger volume of shorter-stay tourists will inevitably be coupled by a stepping up of Malta’s marketing efforts. But given the somewhat dubious success of the MTA’s last foray into branding Malta, one could be forgiven for being sceptical.

“The branding maybe didn’t start off so well locally,” Mr Mifsud acknowledges of the legacy campaign he inherited from his predecessor. But, he adds, what is important is the way in which Malta is to be branded overseas.

The new campaign is expected to start at the beginning of October.

The MTA recently appointed an international company, the Berlin-based Mediaconsulta International to develop a new branding campaign.

The initial images for the campaign were run by focus groups comprised of tourists and trade partners in Malta’s core markets, and were shot down. But now with feedback from the focus groups in hand, the MTA has gone back to the drawing board and new images for the commencement of the October campaign are in an advanced stage of development.

“The exercise, importantly, showed that our perception of Malta is from a seller’s point of view whereas consumers seeing the images in the papers are doing so from a buyer’s point of view, which has been shown to be completely different.”

Indirect branding in the form of concerts, sports and television and film shoots taking place across the islands this year is also going a long way toward raising Malta’s international profile.

The recent shooting of three Coronation Street episodes in Malta brought in hundreds of thousands of pounds of relatively free advertising, being the UK’s most-watched television show with an average of 10.5 million viewers per episode.

Anyone watching the episodes would have seen visitmalta.com adverts practically everywhere and considering the a 30-second advert on the show carries a price tag of over GBP65,000, the returns on the MTA’s Lm8,000 to Lm10,000 forked out are commendable.

The perception of Malta is changing quickly, Mr Mifsud points out, with help from high-profile concerts and events in Malta such as the Isle of MTV and the Powerboat Grand Prix.

“As recent as last year,” Mr Mifsud points out, “the perception of Malta in our core markets was completely different to what it is today. Malta was known as a destination for older people and was risking becoming to Europe what Florida is to the US, and that was a perception that we had to change.

“We made a very conscious effort this year to support and promote good quality events as much as possible. Such events are part of the diversity of our product offering and if our product is enriched in this way people go back to their own countries and say ‘Malta, wow, it’s all happening there’.

“It’s a question of using the money intelligently. The reality is that we have to be out there all the time and that, with today’s rapidly changing markets, what worked in the past, or variations thereof, will not necessarily work nowadays.”

While the market for English language learning has been identified as a key component of Malta’s plans for the future of tourism, especially for the winter and shoulder months, the sector has also been fraught with controversy, particularly this summer, by unruly behaviour on the part of unruly students.

The sector, Mr Mifsud stresses, needs to be better controlled, considering the effect of rowdiness on both the residents of areas frequented at night by students, as well as the more traditional tourists sharing hotels with students.

The MTA is working, together with the private sector, is working on a set of new rules to be implemented by next summer.

Among a raft of proposals is the stationing of security guards at hotels hosting both language students and the more traditional tourist, with the bill of such services being footed by the language school. Such hotels may also be required to provide segregated dining areas and quarters.

Another measure on the table would see a higher age requirement to be eligible for employment as a group leader responsible for students’ extracurricular activities.

The Malta Tourism Authority is leading the initiative and is holding a series of meetings with English language teaching associations. A committee, representing the authorities and the private sector, is in the making and will oversee the formulation of a plan for next year’s summer season.

As for the future, Mr Mifsud expects the MTA to continue moving in the direction it has taken over the past year.

“I think we are moving in the right direction. We are spending our money wisely and we are concentrating on the things that are actually giving us results. We have now appointed Mediaconsulta, which is also consulting us on public relations and advertising, so we are moving in the correct direction in that respect as well.

“What I also see in the future is that we are going to move further away from the tour operator and more and more into the direct market business.”

The MTA has also opened its own offices abroad covering practically the whole of Europe – essential aspects in maintaining productive relations with the international industry and market.

Mr Mifsud adds, “You need to go and see these people and you need to be there in the country to know what is going on. You don’t have to have an office in the high street as we used to have before. That is not necessary but what is needed is a person on the ground and on the road all the time.”

But with such fundamental changes taking place at the MTA under Mr Mifsud’s tenure, he refuses to accept any credit the gear shift Malta’s tourism industry has undergone over the last year, instead preferring to comment, “Without the staff here at the MTA, I wouldn’t have done anything”.

In terms of the potential for future success, he adds, “I would rather keep our feet on the ground and to keep the momentum we have developed going – credit we don’t need. At the end of the day the results speak for themselves and we are working very hard for the results to be maintained and to be increased.”