Hanky panky?

This has been an eventful year in tourism. More so for the Malta Hotels and Restaurants Association (MHRA), which has been in the news regularly on a variety of issues that include over capacity in the hotel industry, the EU membership debate, the identification of a new landfill site and the importance of environmental quality.

The latest of their battles was a concerted effort to persuade Finance Minister John Dalli to shelve the proposed increase in VAT on accommodation as from 2005. In this they succeeded.

"Thanks to a report by the University of Nottingham, which showed that a one per cent increase in price would lead to a three per cent drop-off in demand, and to the strong representations at the pre-Budget retreat in Gozo and the support of other constituted bodies, we managed to change the minister's view on this important subject," MHRA president Winston Zahra said (The Times, November 26).

Tourism's woes however do not stop here. Mr Zahra stressed that, unless immediate action is taken, Malta would be heading for its worst winter in years. "Even with a 4.5 per cent drop in numbers in September and a drop in excess of 10 per cent in October, the government was still trying to make everyone believe there was no problem. However, the reality is that we will probably end the year with a drop of three per cent in the number of visitors, on the back of a four per cent decline last year." The drop in arrivals was compounded further by a drop in the average hotel room rates.

Within this gloomy scenario depicted by the MHRA came Tourism Minister Francis Zammit Dimech's more optimistic perspective. Official figures released by the National Office of Statistics show an increase of 1.1 per cent in January-September over the corresponding period last year, that is 911,609 tourists, while gross earnings amounted to Lm193.9 million, Lm9.9 million or 5.4 per cent up over the same period in 2002. Another positive factor was that the number of nights spent amounted to 9,023,089, a 9.2 per cent increase.

Confusing, isn't it? On the one hand, MHRA is warning that Malta's competitiveness is under threat while Minister Zammit Dimech calmly rebuts by simply quotes official tourism figures, showing that the situation is not that dramatic - unless the statistics are wrong, which is what MHRA suspect.

During a recent meeting with the Malta Labour Party leadership, the MHRA cast doubts on official tourism statistics and described the situation as very worrying (The Times, November 7). It expressed concern over the methods being used by the National Office of Statistics to compile tourism figures. Between the lines, the MHRA is more or less claiming that the NSO is manipulating statistical figures to suit Government's stance that tourism is not suffering unduly.

This is a very serious allegation. Unlike other occasions in the past, however, the statement was not backed by a factual analysis, which is truly surprising considering the MHRA's excellent track record in this regard.

A clarification would be appropriate. The MHRA have in recent times always favoured a professional approach to particular issues, basing their stance on the research findings as presented in specific, purposely commissioned reports. They should be given credit for their excellent quarterly reports on the accommodation sector and their recent survey on environmental quality, while reports were also used to back their stance on the landfill and EU accession issues.

The very fact that the MHRA convinced the Finance Minister to retain VAT on the accommodation sector at the present rate is also based on a report compiled by the University of Nottingham, as mentioned above.

This time, however, they are doubting an official source without substantiating their claims (at least in public) by elaborating on the technical motives prompting them to adopt such a stance.

Since I am aware of the MHRA's expertise and competence in their field of operation, I will not rule out the possibility that they are right. At the same time, I must admit that they have failed to convince me with what seems little more than a blanket statement.

Has the MHRA given due regard to the option that the tourist spend could be shifting from accommodation to other services? Is there a correlation between the reported decrease in room rates and the higher overall gross earnings, due to increased tourist disposable and discretionary expenditure at the destination? If this is the case, is the national economy better off in view of the indirect and induced effects that could be impacting positively on a wider segment of the population?

Other thoughts spring to my mind. Has the NSO's methodology in compiling statistics changed in the past few years? If not, why is MHRA only expressing concern now? Within the context of the "manipulation" claims relating to 2003, what is the MHRA's position on the validity or otherwise of tourism statistics in 2002 and previous years?

I would agree wholeheartedly with MHRA if they step up their campaign for radical product development to improve Competitiveness. But questioning competitiveness through statistics is another issue and the MHRA should sustain its claims about the NSO's tourism figures if it is to contest their validity.

alanvella@keyworld.net