Last year, during a quarterly conference, Tony Zahra, president of MHRA, expressed his anger over the hours-long power cuts that affected Malta and Gozo during the summer months. "We cannot go on building more hotels and more rooms. It's crazy," he had said to a captivated audience which remained silent. Last year, the impacts of overtourism led to a long list of issues, including relentless traffic, littering, excessive waste at Comino Bay, sewage outflows into the sea and overcrowding at most beaches. Add to this unbridled urban environment, overdevelopment and uglification, as well as lack of authenticity flagged by stakeholders, as pressure mounts thanks to increase in demand.
Four years ago, as disclosed in another Deloitte study, it was already evident that sewage issues will be a key problem, with stakeholders saying sewage networks are operating "vastly beyond designed capacity in certain key tourism areas". Zahra's metamorphosis, unusual for someone not known for criticising Castille, has led some to say he has turned a new page. The MHRA, a hotel association, has paid top dollar to Deloitte to produce a scientific study entitled, Carrying capacity study for tourism in the Maltese islands. Sadly, some of its important recommendations were not heeded and now, it is all water under the bridge, as some label the tourism product with a high-risk propensity.
In 2022, various stakeholders were interviewed by Deloitte, who inter alia, highlighted a dire need for improved tourism management and pointed to focused investments essential to sustain growth. On the bright side, last year the skill card was a brilliant idea to improve service within the sector. This card was to be presented by all non-EU workers. As can be expected, such a feature set the cat among the pigeons. It created a financial strain on temping agencies and on applicants themselves, so Malta Enterprise introduced a tax credit scheme designed to support local businesses covering the cost of skill evaluations needed for employees to obtain a pass.
The recent collaboration with the European Union Programmes Agency (EUPA) on Erasmus+ projects further supports continuous professional development. For instance, recent exchange programmes in Rome focused on digitalisation and AI technology, offering tourism employees in managerial roles the opportunity for skill enhancement and cultural exchange. Through these initiatives, the MTA is shaping Malta's tourism industry of tomorrow, developing and empowering its human resources for long-term success in an increasingly competitive global market. The support and collaboration of the main tourism stakeholders is the key behind the success of this workforce's regeneration drive.
As mentioned earlier, unannounced power cuts remain a significant issue. During the past 12 years, the Labour government has invested heavily to improve roads infrastructure and started minor afforestation schemes. Alas, Enemalta still faces problems with power distribution. With hindsight, 12 years ago, the political drive was the issue of an international tender for a €430m generating facility running on imported LNG. This tender was not without its controversies and is operated by a private company, Electrogas.
The government lost no time to announce a one-off 25% cut in W & E tariffs, which worked brilliantly ushering a cause célèbre actuated by the L'Aqwa Zmien slogan. Labour party has since been winning with a landslide at each general election. Regrettably, during the past decade, there was no serious investment in attracting green energy from floating solar farms and renewables. Only recently, energy minister was coy about power cuts while generously paying a private contractor for 24 used diesel generators - aiming to alleviate the issue, though not carbon emissions.
The prime minister then, partially blamed blackouts on the introduction of a power surge due to a revolutionary new shore-to-ship service offered to cruise liners in the Grand Harbour and a heavy use of electric cars. But the latter, only accounts for a mere 7.2% of the fleet - of about 440,000 ICE cars - spewing carcinogenic fumes.
Later, an official explanation stated how the initial shore-to-ship experiment faced difficulties and caused temporary blackouts. But it is not all doom and gloom. Last budget saw the largest cut in personal taxes for middle-class possibly reflecting Malta's strong performance - like other Mediterranean hubs - in generating additional tourism revenue. Nostalgia tells us how, since the 1960s, inbound tourism has grown to rank as one of the biggest export drivers with annual gross revenues lately exceeding €3.1bn.
So, perhaps that's yet another reason we're accommodating property barons' relentless drive to exploit seaside plots, add new hotel towers and extend bedroom inventories. To keep up with the momentum of an increase in tourist traffic more than 80,000 TCNs were licensed in the labour market in a lucrative spree by tempting agencies. One reflects on hindsight... how utterly dependent we are on TCNs' services. These work diligently at moderate wages in hotels, kitchens, food deliveries, hospitals, clinics, major construction sites, airport, hail-rides and catering outlets. Sadly, by contrast, the low incidence of Maltese workers reduces the authenticity of the tourism product.
The phenomenon is increasing the need for more residential dwellings to house foreign workers (a pseudo gentrification - ratchets up price of social housing). On another aspect, one laments how the sewage infrastructure has not caught up with a slew of permits for new hotels, villas and catering outlets, yet the Water Services corporation (which tests bays on a regular basis) has told media that it ruled out any contamination through its network, attributing contaminations to activities by untitled operators.
Last year, several bays were found to be unfit for swimming due to slime oozing from fish-ranching pens. Remember, how the Environmental Health Directorate was advising that bathing is not recommended in Tal-Għażżenin area of St Paul's Bay "due to sewage overflow presenting a risk to bathers' health". A similar situation occurred in the popular Balluta Bay, which lasted three months last summer: the bay was deemed unfit for swimming after microbiological contamination was identified. Another occurrence was St George's Bay in St Julian's, again, this was found to be unfit for swimming due to the presence of Escherichia coli and intestinal Enterococci. In summary, this year, quoting Ryanair CEO, his airline shall be veering for extra business attracting upwards of 4.9 million visitors. The finance minister is pleased with the inflow. He is expected to book a handsome cash boost and diligently plough back such surplus - possibly to cut taxes and subsidise energy.
In conclusion, the government has put forward Vision 2050 - an exercise that harkens a national consensus where the needs and aspirations of the country are manifested. Rumour has it that the government appointed an American consultant to carry out non-partisan research improvising Envision 2050. Could they serve as our talisman, guiding us towards a higher quality of life, achieving Net Zero, and perhaps inspiring us with dreams of extravagant, Dubai-style reclamation projects?
Only time will tell if such crystal ball gazing can conceive for us better living standards and extemporise a dynamic economy.
George M. Mangion is a senior partner at PKF Malta
gmm@pkfmalta.com