MLP tourism spokesman hits out at MHRA over EU decision

Opposition tourism spokesman Karmenu Vella yesterday accused the Malta Hotels and Restaurants Association (MHRA) of being neither objective nor credible in its conclusions on Tuesday in favour of Malta joining the EU.

Mr Vella said during the debate in parliament on the estimates of the Malta Tourism Authority that he could not understand how organisations such as the MHRA could take decisions without properly hearing both sides of an argument.

Everything appeared to have been orchestrated in the MHRA conference on Tuesday, and its outcome was far from being a surprise.

Indeed the MHRA studies were conducted by an agency headed by a government MP. Did anyone expect a different outcome?

Mr Vella said one of the reasons why he had decided not to attend the conference, had he been in Malta, was that he would have been the only speaker who was not in favour of Malta joining the EU. So much for objectivity.

Out of a full-day conference he would at best have only been given three minutes to speak, effectively reducing him to a non-entity.

Should the MHRA call another conference, he would gladly speak for an hour or more to enable its members to hear the other side of the EU argument.

Referring to the concluding speech by the president of the MHRA (Winston Zahra Jr), Mr Vella said it was not true that the association had given everyone the opportunity to objectively analyse the EU issue. The conference itself proved the contrary.

The president had claimed that the MHRA was apolitical, when some within the association were more political than he was and had also addressed the PN council.

The MHRA president had claimed that one had to take a holistic view of tourism, yet in his speech he only referred to VAT, the tour operator margin scheme, the euro, the airport tax, health and safety, consumer protection, airline deregulation and the environment. Was this being holistic? What about the national interest and the interests of the workers?

One could argue that importing foreign labour could be good for hotels, but was it good for Maltese workers and Malta in general?

Wouldn't having foreign tour operators and tourist guides operating here not be bad for the national interest since more tourist funds would end up leaving the country?

The MHRA's arguments on VAT were puzzling and had not been understood by the association's members whom he had spoken to. In any case, how could one argue that VAT would lead to higher tourism revenue?

If Malta joined the EU, VAT would be charged on tourism as the EU decided. But under the MLP's alternative policy, it would be the Maltese government which decided which sectors should be taxed, and by how much.

As for competitiveness, wouldn't the removal of TOSS, the imposition of VAT, and the removal of the policy flexibility which Malta now enjoyed lead to a loss of competitiveness?

Wouldn't tourism competitiveness also suffer from VAT on food, from the tour operator margin scheme, from the imposition of visa requirements on a number of countries, from the new airport charges and from higher wages?

It had been claimed that the UK airport tax would have a negative compounded effect of 1.4 per cent if Malta did not join the EU.

Why was a "compounded" effect being calculated when this tax only hit tourism from the UK. If Malta remained out of the EU, it would be free to take other measures to nullify the impact of this tax.

Mr Vella said it was not true that the association did not know the MLP's views on the EU and tourism, as had been claimed. The position had been repeatedly explained, in parliament and outside.

In other parts of his speech, Mr Vella said he could not understand how almost Lm500,000 of the funds allocated to the tourism authority last year remained unutilised, even though tourism was in a crisis. Why would spending on sales and marketing drop by more than Lm2 million this year? Was this because the figures for past years had included TOSS? If so, it showed that funds which used to be spent on TOSS were not being re-directed to marketing.

While spending on marketing was sliding, projected outlay on salaries would rise by Lm250,000.

Mr Vella said he could not understand how the MTA's product directorate was headed by an estate agent, however genuine and hard working he was. Similarly, why was a former banker heading the human resources directorate?

Why would the new head of the marketing directorate not be part of the main board of the MTA?

Mr Vella said the MTA needed to clarify the direction it was following. The recent MTA annual meeting rightly started with an emphasis on higher rated business but ended with an advert which went back to sun, sand and sea.

Tourism performance in Malta had deteriorated, especially considering that according to the World Travel Organisation, tourism performance worldwide last year had increased by three per cent.

When tourism in Malta dropped by three per cent in 2001, Turkey's had increased by 14 per cent and Bulgaria's by six per cent.

Moreover, Turkey made a profit of Lm40 from every Lm100 spent on tourism packages while Malta sold the same package for Lm120 and only made a Lm10 profit.

This situation was unsustainable and the MHRA should continue discussing the situation rather than act as a front for the government when it came to the EU.

Tourism Minister Michael Refalo, who also spoke in the debate, insisted on the importance of EU membership for tourism.

He also pointed out that the MHRA's research was drawn up objectively by professional consultants and it was the hotel operators themselves, and not the MHRA council or its president, who had voted overwhelmingly in favour of EU mmbership.

He also said that if no war broke out in the Middle East and terrorism did not rise again, tourism arrivals this year were expected to return to the levels of the year 2000.

A full report will be carried tomorrow.