A year ago it was reported that the Maltese Embassy in Riyadh had managed to get Saudi tour operators interested in destination Malta (TOM, 24 October 2006). Later, the Excelsior Hotel management mentioned the relevance of the Arab market (TOM business supplement, 25 January). Prime Minister Gonzi envisioned Malta as the most exclusive destination of the Mediterranean (TOM, 4 September). One can assume that this included becoming a favourite business and leisure travel destination for Gulf State tourists, meaning both locals and well-paid expatriates from there. Stronger economic ties require good air links too. During the Maltese-Saudi meeting tourism development was mentioned as one of the core issues (TMID, 22 November).

Regarding potential geographic expansion of Malta's route portfolio, I had already discussed the Mediterranean (STOM, 4 March), the Germany/Luxembourg (TMID, 23 April) and the British Isles (STOM, 13 May) areas earlier, dealing with technical possibilities and market reality pressures of direct flights to/from the US North-East Coast and the PRC operated with lower-marketing risk aircraft (STOM, 5 June 2005).

For Near/Middle East routes, for all places except Dubai it means first flying to Dubai, transiting, and then flying to Malta with a stopover en route, or transiting via some Euro or Mediterranean airport: quite time-consuming. Certainly additional Gulf network carrier capacity is a threat for Austral-Asia volume currently routed via Dubai or Euro hubs. With the current Arabia enthusiasm one should not forget that indubitably the point-to-point market is limited. Nevertheless there might also be opportunities.

Saudi Arabia

So if Saudi tour operators are reportedly interested in Malta, what about a flight from Riyadh and/or Jeddah? In 1998 Air Malta actually announced plans for a Jeddah run for 1999, which did not materialise.

Saudi Arabian already flies regularly to Mediterranean premium destinations Malaga and Nice, two Saudi favourites. For Malta, Saudi Arabian could use 150-180 seat MD-90s or A320s, meaning way lower trip costs and marketing risk than for the long-range widebody used for Malaga and Nice. Technically, even their Embraer 170LR should work (lowest marketing risk but higher unit costs). Saudi Arabian has an in-house tour-operator called World Holidays as further distribution channel. A tie-up with Libya or Tunisia remains a possibility. Saudi LCCs NAS Air and Sama only fly regional routes.

Apart from Saudi-sourced tourism, Saudi Arabian networks across the Arabian Peninsula and some Asian countries. Alternatively, Air Malta could keep a plane occupied at night. Tour operator contracts are necessary. Saudi Arabian remains a good choice.

Qatar

Qatar invests in a future-oriented economy. Qatar Airways is part of this plan. They open up “thinner” routes with Airbus A319/320s and either maintains them like this or switches to larger planes. Every route Qatar Airways touched has either been kept as started, or upgraded, but never given up, and by using smaller jets for the start-offs than for example Emirates, they can be open also to smaller markets. A flight combining Malta with Tripoli or Tunis (both already linked) could be a solution. Qatar Airways is a network carrier linking the Austral-Asian region. The route is not as urgently needed as Shannon, Tel Aviv, or a southern Poland link; one should be patient.

UAE

Dubai saw a first Air Malta service during the Dom Mintoff administration but this service was later discontinued. In 1994 it was re-launched (combined with Bahrain), Air Malta using Airbus A320s and A310s.

Many new routes were established those days, set-up costs absorbed by Air Malta. But after all Air Malta is Air Malta and not a certain low-cost carrier getting tons of money thrown after it even for parallel flights.

In 1997 Air Malta added Abu Dhabi as second UAE airport. Then in 1998 Emirates came in on the Dubai route, via Athens and Air Malta had to give up Dubai and Abu Dhabi.

Today Emirates runs Dubai-Malta via Cyprus both ways five times a week, code-sharing with Air Malta, using large B777s. Emirates networks to the Austral-Asian region and provides palletised cargo capacity. A problem might be the seats occupied only on the eastern leg. Is the potential between Malta and Larnaca really equivalent to that between Larnaca and Dubai? Emirates’ Malta station works very hard to promote bilateral tourism but it should be a challenge.

Cargo, charter and LCC airport Sharjah, home base of Air Arabia, is located directly next to Dubai airport (ca. 20kms). Emirates' commitment to Malta should not be “rewarded” with subsidising parallel flights from Sharjah installed just to placate some low-cost-at-any-cost fans seeking cheap shopping flights. One has apparently already driven British Airways away like this (basically all other GB-Airways destinations will see BA services). Anyway Air Arabia's only European destination is Istanbul, far nearer and with incomparably higher potential. So, no room for expansion?

Theoretically, Emirates and Air Malta might add a non-stop code-share flight operated by Air Malta on those days when Emirates is not operating, hence providing a daily link for passengers and cargo conforming to AKH measurement norm. Emirates would not need to risk widebody capacity, while it would improve Emirates’ connections. Optimal scheduling (night hours) improves Air Malta’s productivity. While in-flight entertainment cannot compare, a non-stop run offers higher value by saving something like three hours each way (no Larnaca stop-over plus according flight patterns plus faster baggage claim and so on).

Abu Dhabi is roughly 120kms away from Dubai, so not exactly a “new area”, and is economically stronger than other emirates. Etihad now has A319/320s, some temporarily leased from/through Air Malta, for “thinner” routes. An Etihad link operated by Air Malta aircraft under the Etihad lease contract might be possible.

Egypt

In 1977 Air Malta started flying to Cairo, in later years combined with Larnaca. Services ceased last winter. When Emirates took over Larnaca, Air Malta struggled with Cairo only, with inevitable consequences.

However, despite eventual visa trouble, maybe there is still room for a flight operated by Egyptair Express’s Embraer 170s, with half the capacity of Air Malta’s planes. Joint marketing should not hurt.

Israel

While already mentioning it in March (Mediterranean), Israel flights return here due to geographic context. Gideon Meir, Israel’s ambassador to Malta, encouraged bilateral flights during the celebration of Israel’s Independence Day (STOM, 13 May). In spite of this friendly invitation there seemingly was zero reaction from concerned parties - while concurrently claiming the needs for more tourists and new routes.

With only some most sporadic Air Malta charters this is a clearly underserved market. Regular flights ceased almost a decade ago.

Tourist spots in Greece, Cyprus, Turkey, Romania, Italy, Croatia and Spain are all profiting from the Israeli source market as Israelis are travelling more than ever before, while incoming tourism is improving thanks to better security. Malta is only half way from Israel compared to southern Spain: cheaper and faster to reach. Many Muslim destinations competing directly against Malta for the “all important” markets are no choice for most Israelis: less competition.

Arkia is Israel’s leading tourist-oriented carrier, offering flights only as well as other holiday modules. Their fuel-efficient B757-300s have ultra low unit costs but the size also means a higher capacity/marketing risk. Israir has smaller A320s available. An Air Malta operation for Arkia, or combining various tour operators and own flight-only sales remains attractive. Malta does not really match El Al’s routes profile, except maybe marketed through the Sun d’Or brand.

Twice weekly Air Malta flights, or alternatively one or maybe during peaks one and a half with Arkia (Arkia’s B757-300 has 280, Air Malta's A319s 141 seats) could be a start.

Seasonality

The core issue is however to profitably occupy the already existing seasonal airline and hotel overcapacities. As one has now reportedly taken to sending tourists over to Italy on arrival one obviously does not need more tourists during the peak season. There obviously was an imbalance between available air seat and accommodation capacity. It is however also no use boasting an increase in bed capacity for peak summer when it would only mean further severing the undeniable off-peak occupancy rate problem otherwise.

The media-gene arrivals figure only says how many people step down the gangways. What counts for jobs with hotels are bed nights spent. Additionally, a DIY transit person changing from one no-frills flight to another flight (no-frills or not) formally counts as a tourist arrival because he leaves the arrivals and checks in again in the departure block, so formally there was an immigration (tourist arrival) to a place, while a transit passenger, checked through with full-service carriers on both sectors, stays in the transit area and hence is no tourist arrival. One thus has to be a bit careful before lambasting Malta’s figures of the somewhat stagnant last years through such comparisons. Many places have profited from the first-time development of mass air transport replacing long overland travel, as tourists have more time to spend on holidays than on the autobahn or ferry, meaning they can either stay longer, or visit twice using the same holiday time. Malta, and comparable destinations facing the same challenges has been accessible by air only anyway. Fifteen years ago nobody went to Sicily. Sure they registered higher growth rates than Malta in the last years – they started from basically zero.

The priority must be making the destination more attractive during off-peak season, helping both hotels and carriers. Diversifying source markets means spreading risks of economic slowdowns in according consumer markets. New routes can be interesting provided they are genuinely new – and not simple cannibalising services.

Improved advertising and aiming at more off-peak-oriented loads like conference/IT, cultural, event, and now hopefully also the labour-intensive medical services tourism, seem to be the right way. Furthermore, niche markets like those segments of sports tourism taking the natural realities of Malta into account, like, during summer, diving, remain interesting. Malta can also make much more from religious tourism.

Also the criticised rock ‘n’ roll youth summer tourism is a market. One should not go into fundamental opposition: carriers can get more seats filled, one can fill certain huge hotel bunkers that would otherwise remain empty, it provides some extra fun for Maltese youths, and irritating entertainment industry bosses might not be wise. More efforts to curtail damage to the core business (e.g. by developing certain hotels in certain zones into dedicated youth hotels) and better measures to protect the health and property of locals from some of these young tourists would be welcome.

On the other end of the age scale, “snowbird” programmes are indeed overdue for the shoulder months. While these might not blow up the media arrivals figure they can create more bed nights at least in the lean months. A “snowbird” staying 30 nights is only one arrival but occupies as many bed nights as 10 three-night tripper arrivals. Just getting short trippers is not the panacea: these do not visit Gozo.

The encouraging fact that Malta is a top single tourist destination has its reason in moderate single room surcharges of hotels (this can cut costs by several hundred euros per stay compared to competing destinations) and many opportunities to meet other people with many activity opportunities on compact area.

Despite some laudable efforts, the quality of the product regarding the environment remains a challenge. AD always said that a sound urban and natural environment is essential for tourism success. One should have listened to them some 15 years ago. Tourists confronted with shabbiness, demolition/construction sites galore, ugly buildings, fleecing, murky waters, drunks, and people making a racket might not recommend a place even if it offers compactness with many great sights and activities, a good public transport infrastructure on the main island compared to competitors, easy communication due to being English-speaking, and Eurozone membership as a further practical plus.

Grand Harbour, probably the world’s most beautiful large harbour with great scenery, is one of Malta's great tourism assets.

The sunny, warm island aspect remains a key sales factor, but one cannot sell “sunny Malta” in deep winter (remember that gas cylinder crisis one winter). During that period one competes with places like Egypt, the Canaries, the UAE, or south-east Asia, Eastern and Southern Africa and the Caribbean for longer stays, as well as Christmas and winter sales shopping city destinations on the short-trip front, plus skiing resorts. Maybe one should concentrate overhauls of hotels and the tourist centres then.

No tourist decides for or against a destination over another one against a few euros of airport charge or on the flight. It is good direct and indirect advertising that makes the initial customer contact. For repeat business, one might again decide for the product or at least recommend it (important for destinations with limited marketing funds) on the ground of the impression hotel and destination gave.

Making more out of central/eastern European markets, whose tourists tend to take longer holidays could be beneficial for the creation of more bed nights spent in hotels. As one might see more red tape for non-EU countries like Russia, maybe one could compensate this by further improving eastern EU markets. While one is well positioned for particularly Hungary (Air Malta/Malev), but also Czech Republic (Air Malta) or Bulgaria (Air Malta), more could be made maybe from other places. But that is material for another discussion.