The Malta Independent editorial (Limiting damage, 3 March) was an expression of concern for the tourism industry for the year 2009 following the NSO survey publication on tourism figures for January 2009. The same editorial however claims that when on 22 November 2008 TMID reported a potential drop in tourist arrivals for 2009, it was “chastised” by the authorities for such reporting. The statement appears to give the impression that the authorities wanted to hide the problems we were to face in 2009. This is not the case.
The picture I have always strived to give is a realistic one. Indeed on 19 November 2008 The Times carried an article I had written entitled “Tourism winter blues”. In it I had stated that the tourism industry worldwide is being hit by two major turbulences, the first being the recession that was and still is hitting the world economies, and the second being the crisis that had ripped apart the airline industry. I went on to write that “our tourism industry cannot escape the winter of discontent. We cannot realistically expect to turn away the dark clouds. However, we can, indeed we are, ensuring that we ride this storm, with minimum losses”. At the MHRA annual general meeting held on 21 November 2008, which event was reported by TMID a day later, I had clearly stated that the situation for 2009 “does not appear positive”.
The challenges the tourism industry is facing this year come from various fronts. The first is that of accessibility, which in our case means air links, given that over 95 per cent of our tourists come by air. According to figures published by the Official Airline Guide there were 46 million seats cut in the winter of 08/09 as compared to 07/08, with 83,000 fewer flights offered by airlines within the European Union, as the airline industry is engulfed by the economic crisis. Malta did not escape unscathed as this winter we lost the Cologne and Stuttgart route operated by German Wings, the Bremen and Valencia route operated by Ryanair following its decision to close its base there, and the Malpensa route operated by Alitalia whose economic problems need no introduction. The authorities did not stay idle in the face of this reduction.
MTA and MIA officials took the “bull by the horns” by entering into negotiations with airlines to open up new routes long before being called to do so by the MHRA president in his 21 November address. A call for airlines interested in operating from UK regional airports was in fact made in October. As a result of such negotiations and calls, we will see the following new routes: SAS will start operating flights from Stockholm to Malta from March; Ryanair has started operating from Trapani, and will operate Bristol from end March and Edinburgh from June; Easyjet will start operating Newcastle from end March; Clickair will operate Valencia for the summer; and Air Malta will start operating a new route from Charles de Gaulle airport and will be increasing its capacity in France by 40 per cent.
Moreover this summer Air Malta will dedicate to Malta routes all of its 12 aircraft, whereas before it used to dedicate only 11. We will consequently see increased frequencies on some routes and new routes being introduced by the national airline. Readers will appreciate that increasing frequency of flights and introducing new routes is not easy at a time when airlines are shedding routes or at best consolidating existent routes. It is moreover to be pointed out that given that most of the new routes will start operating as of end of March, the problem related to reduced seat capacity will remain with us at least till then.
However as I stated in my address to the MHRA meeting, the challenge being faced by the tourism industry is not only one related to accessibility. I wish it were. It is also one of demand given the current international financial and economic crisis which is eating into most consumer pockets and corporate budgets. Our core markets are the UK, Germany, Italy and France. They are each officially in a recession with rising unemployment. To compound matters further, in our primary market, that is the UK, sterling dropped 35 per cent of its value as against the euro in a matter of a year.
But here again, the authorities did not decide to sit back till the storm passes. The MTA has embarked on a marketing campaign that is unprecedented. TV adverts prepared by National Geographic will be aired not only in the UK but also for the first time in Germany, France and Italy. Needless to say all this costs money, a lot of money, but the additional money voted by the government during the last budget in the face of this international crisis will help us run the extra mile. MTA PR agents and offices overseas are being pressed hard to get Malta more coverage in newspapers, magazines and TV programmes, and they are succeeding. In the last few weeks we have seen a programme on Rai Due in the popular programme Voyager regarding our Neolithic Temples, and features in prominent magazines such as House and Gardens, GQ, Geographical and the History magazine to name a few.
Are we succeeding in stirring demand in the face of this crisis? Are we doing enough? There are 12 months to the year and you never feel that what you do is enough.
In so far as the figures for tourism arrivals in January 2009 are concerned, these are certainly not on the face of them encouraging. But statistics are not there to be read for their face value. They are there to be examined and digested. While admittedly inbound tourist in January 09 saw a drop of 19.1 per cent (12,000 tourists) when compared to the same month last year, the figures are the same level of 2007. Both years were record years for Maltese tourism. However hoteliers have taught me that they are not interested in arrivals but in bed nights because they would rather have one tourist that spends seven nights in Malta, then three tourists that spend one night each. The figures for total nights spent in January 09 make more interesting reading because the drop compared to January 08 is only of 4.6 per cent and when compared to January 07 we actually had an increase of 40,000 bed nights. Moreover the non-package expenditure by tourists on accommodation increased from e2,810,000 in January 07 to e4,071,000 in January 09. It is moreover to be remembered that in the winter months most of the business is generated by the conference sector, which has been badly hit by the financial crisis.
The TMID editorial argues that we should aim to retain what we earned in 2008 and not go back to 2007. I would say that ideally we should aim to exceed what we earned in 2008, but I am realistically aware of the fact that we are dependent for our tourism on what is happening around us, as are other destinations. For this reason the UNWTO’s outlook for tourism in 2009 worldwide has been revised downwards to negative growth. Not because there is a crisis in tourism, but because there is a crisis out there (financial, economic) that will and is affecting tourism. In other words the crisis is affecting not people’s willingness to travel but people’s ability to travel.
In conclusion the TMID editorial recommends that the government should work harder to see that what was gained in the past is not lost or that at least government should limit the damage, given that thousands of jobs depend on tourism.
The government is very much aware of the importance of tourism. For this reason I have been heading a core group composed of representatives from the MIA, MTA, Air Malta and the MHRA to monitor the situation since early November and to take remedial action where necessary and possible. For this reason the government has encouraged the banks in Malta to grant a one year moratorium to hotels on capital payment of their loans, which moratorium will enable such hotels to have more cash flow available thereby enabling them to save jobs and at the same time invest further in their product. For this reason the government will be spending nearly e120 million over the next few years to improve our tourism product. It is also for this reason that the government has been emphasising to all stakeholders the need to offer our tourists the best value for money and not charge as if there is no tomorrow.
The months ahead are not going to be easy except perhaps for those who wish to sit on the fence and criticise. We are navigating in unchartered waters. But the government is working, and has been working, on two levels: first to increase demand and accessibility, as well as improve our product, and secondly to provide support to tourism’s stakeholders by working closely with them. With determination, level headedness and a sense of realism I am convinced that this industry can hold its own and prepare itself for better times that will eventually come ahead once this unprecedented cycle is over.
Dr Mario de Marco is Parliamentary Secretary for Tourism