'Terminal' must not mean 'end of life'

Cruise liner business is booming in the Mediterranean and in the whole world. By the end of this year 14 million passengers would have taken their holiday enjoying a cruise somewhere in the world. This is a relatively young industry. In 1996 the number of cruise passengers in the whole world reached a million and half. Since then, the growth has been dramatic every year when you consider that this year the number of cruise passengers globally will reach 14 million.

Notwithstanding the Middle East crisis, which continues to destabilise the region and makes the Eastern Mediterranean dangerous to visit, cruise liner business is growing rapidly in the Mediterranean. Cruise liners have cancelled visits to ports in the Eastern Mediterranean but they have rerouted their cruises to the rest of the Mediterranean.

Italy is one of the countries to gain in this situation. By the end of this year four million passengers travelling on 120 ships belonging to 60 different companies would have visited one or more Italian ports. Civitavecchia is set to become the most popular port of call with 680,000 passengers. Venice is in second place as it is expected to be visited by 670,000 cruise passengers, then Naples with 630,000, Savona with 550,000, Livorno 390,000 and Genoa 250,000.

Other countries that are benefiting from the growing cruise liner business in the Mediterranean are Tunisia, Spain, France and the Greek and Turkish islands though these remain vulnerable and are considered risky because of their proximity to the Middle East.

And how is Malta faring in this sector compared to its Mediterranean competitors? Throughout this year so far, cruise passengers visiting Malta have decreased month after month. There is no indication that this very negative trend is going to be reversed in the coming months.

Figures published by the National Statistics Office last month show that "in the first six months this year, the number of cruise passengers who visited the Maltese Islands went down by 47,440 over the same period last year and amounted to 76,953." In the first six months of 2003 the number of cruise passengers coming to Malta had been 124,393.

But it is not just a question of numbers. What is worrying is not that fewer cruise liners are calling here for a day when less than a third leave the ship and visit parts of the island and generate some business for shops, heritage sites, taxis, coaches, bars and perhaps some restaurants. The real lucrative core of the cruise liner business is created when a country builds the necessary facilities and conditions to become a hub for the cruise liners plying the sea in the region.

Urgently needed: a resurrection

Cruise liner business to Malta is falling at the time that the country is developing its facilities to become such a hub in the Mediterranean. VISET Malta plc was set up to build and manage the cruise liner passenger terminal in Valletta. This is a good infrastructure project for the national tourist industry that will cost Lm12 million.

This is a step in the right direction but a lot of work has still to be done to establish the success of the cruise liner business in Malta. That success is not guaranteed! Competition is fierce and other countries are exploiting their comparative advantages to attract business to them.

VISET has had to revise its business plan because of the big drop in cruise liner arrivals in the last year. When Malta joined the European Union in May major cruise liners, including Royal Caribbean, dropped Malta from their itinerary because the island was obliged to eliminate duty free concessions as from May 1. Last year Royal Caribbean ships visited Malta 26 times. There were no such visits this year.

This shows that if Malta wants to attract cruise liner business it must create other comparative advantages to beat the competition. Malta will be facing fierce competition not only from other EU states but also from neighbouring countries like Tunisia and Libya who can still offer tax advantages, as they are not bound by EU membership regulations.

In the meantime the cost of cruise liner visits to Malta is set to go up as in the coming years VISET plans to raise the Lm2 tax on visiting tourists to Lm3 to increase its revenue. The cruise liner terminal in Valletta will only be viable if the present negative trend is not only reversed but volume is increased year after year and companies operating in the Mediterranean choose Malta not only as a port of call but as a hub from where their ships and passengers leave and return generating profitable business for airlines, hotels, taxis, casinos, heritage sites and restaurants.

The viability of the project also relies heavily on retail business facilities in the terminal complex; 15,000 square metres of retail outlets will compete directly with central Valletta shops which so far have picked up the business generated by cruise passengers visiting Malta.

What is Government doing to turn Malta into an attractive and friendly hub for cruise passenger ships in the Mediterranean? What concrete steps is Government taking to bring to Malta the key players in the cruise liner business to persuade enough of them to use the island as one their main operational bases in the Mediterranean to revive what at this stage looks like a dying sector of the local tourist business and make it into one of the main engines of growth of our industry?

evaristbartolo@hotmail.com