Gozo ferry fares rise "a threat" to Gozo's economy - report

The Gozo Business Chamber and Gozo Tourism Association yesterday sent the prime minister a report warning that an increase in Gozo ferry fares "risks throwing Gozo's regional economy into recession".

The report, commissioned by the two constituted bodies and carried out by Deloitte and Touche, also states that an increase in fares beyond a certain range - 30 per cent or more - may mean that Gozo Channel would be worse off since higher prices would be offset by a decline in passenger numbers.

A 10 per cent increase in fares, according to the report, would lead to an increase in revenue for Gozo Channel of Lm184,000 in spite of a four per cent drop in passengers. However, the impact of this on the Gozitan economy would cost some Lm1.1 million.

Tourists' annual contribution of around Lm35 million accounts for half of Gozo's economy.

Following substantial price increases in 1997, passenger volumes to Gozo fell in eight of the following 12 months by between one per cent and 13 per cent over the previous year, the report says.

The most sensitive market segment are the Maltese, who make up almost one third of ferry users, or 515,000, and are 40 per cent contributors to the Gozitan economy.

Nine per cent of all annual passenger crossings are made by Maltese visiting the sister island on holiday, eight per cent are Maltese day trippers on business, and 14 per cent are Maltese day trippers for leisure.

However, a 20 per cent increase in fares according to the report, will lead to a proportionate 27 per cent decrease in Maltese day trippers and a four per cent dip in Maltese taking holidays on the island.

"Domestic tourism caused by Maltese visitors is a unique component part of the Gozo tourist industry, and considered to be an important hard core and regular spend, especially outside peak season..."

"Maltese day trippers face alternative leisure choices in Malta itself which incur no travel costs, while Maltese holidaymakers choosing Gozo for their short break face stiff competition from nearby destinations such as Tunisia and Sicily where transport costs are reasonable, accommodation is cheaper and there is the psychological advantage of having been overseas."

On the other hand, the report says a price increase for foreign visitors would have less impact. Tourist day trippers account for 26 per cent of crossings, while the figure is five per cent for holidaymakers.

"The vast majority of international visitors to Gozo are day trippers and their economic impact, while very welcome, is considered to be quite limited...

"There would not be an extremely negative response to a fare increase, whereas the response of the Maltese visitor would be proportionally more dramatic."

The report proposes a number of measures for Gozo Channel to consider in order to become more profitable, since the company loses around Lm1 million per year - though the stress is on increasing passenger numbers, especially at off-peak times, as opposed to fare increases.

Suggestions include cheaper fares for weekend returns, travelling off peak, cars with four passengers, season tickets, group fares, guaranteed reservation fares and internet booking.

"It is important for promotional fares to be marketed and to be user-friendly if they are to be successful, which is perhaps a failing with some of the current promotions...

"Indeed, the strategy by the government must be to look at possibilities to stimulate demand for travel to Gozo... due to the positive impact that arises as a consequence in a similar way that regional governments overseas have been encouraging the introduction of low-cost airlines".

Income can also be generated by commercial operations at the new terminals and on the ferries themselves, the report says.

The Government Investments Minister and Gozo Minister have also been sent a copy.