Generally speaking, it would be unfair to attribute this general improvement solely to the improvement in the global economic situation after the disastrous year of 2009, although numbers were expected to increase as economies abroad started to recover.

Indeed the registered growth in tourism came at a time when the economy started growing again in GDP terms after a sustained period of contraction. Doubtlessly our economy is very volatile and susceptible to international pressures and our exports, tourism no exception, depend on the strength of demand abroad, so they will fluctuate accordingly.

Having said that, it would be foolhardy not to acknowledge that efforts by the authorities to regain the lost ground of 2009 have paid off, at least for 2010. I have had the pleasure of meeting The MTA CEO at a radio show at the weekend, and he had reason to feel elated that his work has shown positive results, despite fierce competition by neighbouring countries all set to grab pole position for prospective tourists.

However, quite paradoxically, the results obtained in terms of numbers and bed nights have not yet translated into tangible benefits in the general economy. In my first week as shadow for the tourism sector, I have been shopping for information from Malta’s top constituted bodies and individual hoteliers and restaurateurs, as well as private advisors. There are obviously more who I will be tapping in the weeks to come, but a common position is already taking shape.

Despite the positive results obtained in incoming tourism, hoteliers’ and restaurateurs’ profits are worryingly in decline. Now there is this temptation to believe that hoteliers and stakeholders alike in the business have a knack to carry on complaining even when the scenario is bliss. But how can you blame a five-star hotel owner whose utilities bills have shot up from an annual 600,000 euros to a staggering one million euros? And how can you ignore the concerns of the manager of a medium-sized restaurant who receives quarterly utilities bills at the rate of 10,000 euros? And this is not to mention the hundreds of entrepreneurs and SMEs directly and indirectly feeding the tourist market who are receiving bills disproportionate to the size of their operations.

All this money is being siphoned off their profits at a time when they have no alternative but to absorb the increase in VAT rates to a large extent because of pressure on prices of the last budget and other creeping indirect rises in their operational costs, fuelled by increasing fuel and gas prices, as well as food costs and other ancillary costs at the turn of the year. And with seat capacity on the increase, with the introduction of new routes, labour costs will continue to be high for hoteliers in particular, as human resources will be necessary to meet demand. There are indeed 14 hotels that have closed down their operations periodically in winter.

The Government seems to be its own worst enemy. While it strives to boost the number of new arrivals to Malta, and in this vein it did quite a good job in 2010, it is loading the private sector with new costs, thus impeding the benefits of the progress registered from reaching the real economy. Instead the benefits go straight to the government coffers in the form of taxes and tariffs.

It is true that in the face of official stats we feel the worst of the recession is over and the results have at least helped the stakeholders to float longer on the surface, as it would have been devastating to them if the numbers of new arrivals had not swelled.

But it is equally true to say that because of the Government’s own flawed policy of increasing operational costs, it is stultifying progress towards the long-term sustainability of the tourist industry.

Dr Gavin Gulia is the Opposition’s Main Spokesman on the Economy and the Self-Employed