Tourism industry in crisis, Sant insists

Labour leader Alfred Sant has appealed to the government to focus its attention on tourism which he said was in a crisis.

Addressing a news conference in front of the arrivals lounge at Malta International Airport, Dr Sant said tourism was crucial to the economy because it provided the livelihood of about 42,000 families.

When Lawrence Gonzi was appointed Prime Minister he had said tourism would be one of his main priorities. But a year after his appointment, Dr Sant said, the sector was not doing well.

Problems at the Malta Tourism Authority, he said, were extensive. Since its setting up in 1999 the MTA, which had cost the country no less than Lm42.5 million, had developed in an uncoordinated, confused and very costly way.

Since 2000, expenditure on publicity campaigns continued to drop in spite of an increase in wages, administrative expenses and indirect costs.

The chief executive officer had an annual salary of Lm25,000 and in five years the tourism sector had deteriorated although the authority had cost the country more than Lm8 million a year.

Yet, in spite of all this, the government could not abdicate from its responsibilities and hide behind the MTA, Dr Sant said.

Between 1999 and last year the number of tourists visiting the country had dropped by 60,000 while income from tourism remained the same. But by the end of last year the number of workers in the sector had dropped from 12,700 to fewer than 9,000.

The situation in Gozo was worse and the helicopter and Gozo Channel fares were not helping the situation.

Dr Sant said the government was duty bound to give an explanation on its failure in tourism year after year despite the millions of liri being pumped into the authority.

He said the Malta Hotels and Restaurants Association said that the bad tourism results in the first four months were a warning that unless the situation changed the industry would not encourage investment and many jobs could be lost.

At the same time the association declared that it was not hopeful that the government's target of an additional 50,000 tourists each year would be reached.

According to replies to parliamentary questions, Dr Sant said, the number of hotels last year dropped by 18 and another 13 were to go this year. This was worrying and alarming.

The Labour Party encouraged the government to show initiative and work on projects that would help tourism such as the White Rocks, Connections, the Barrakka Lift, Dock 1, Ta' Qali Crafts Village, City Gate, the old Opera House and the golf courses.

Tourism spokesman Evarist Bartolo said the helicopter service in April this year was used by only a third of the number of passengers who used it last year.

The Lm50 fare for a crossing was higher than the cost to go from the UK to France or from Spain to Italy.

There was also a drop of 22,000 Maltese and tourists using Gozo Channel ferries.

All this was having a negative impact on the Gozitan economy. By October five hotels were expected to close down and the number of beds was to be cut by half.

He praised the courage being shown by certain Gozitan entrepreneurs who kept certain work in tourism in Gozo going although Maltese and foreign investors were leaving the island.

Replying to Dr Sant's comments, the Tourism Ministry said the sector last year grew by 3.5 per cent in volume and by three per cent in terms of arrivals. These results were better than those obtained by Eastern European and Mediterranean competitors.

The ministry said that in the first four months there was a marginal drop of 0.4 per cent in the number of visiting tourists but there was a 1.8 per cent increase in income. This meant a Lm1.8 million increase.

Figures issued by Malta International Airport showed that in May there was a 4.3 per cent increase in the number of passengers handled by the airport.

The MTA's total marketing budget had increased from Lm3.8 million in 2000 to Lm6.1 million this year and the allocation for advertising from Lm1.5 million to Lm2.2 million. As a result of the current restructuring, the MTA saved Lm342,236 from administrative expenses in 2004 and spent more than Lm5 million to promote Malta overseas. While between 2002 and November last year the number of full-time jobs in tourism dropped by 172, part-time jobs increased by 1,094 - from 3,514 to 4,608. In November the number of workers in the industry numbered 16,705.

The ministry said there were 16 projects for the building of new hotels or extensions with a planned investment of Lm51 million.

Five new hotels will be opened this year at an investment of Lm39 million and, altogether, these would provide 1,844 beds. These were expected to attract 27,000 tourists, the ministry said.