Smiling in the face of an uphill struggle

When the former - supported by the current - president of the Malta Hotels and Restaurants Association (MHRA), Winston J. Zahra, lambasted the manner in which the government and the Malta Tourism Authority (MTA) have handled tourism recently, reacting to the "washout" figures of the first three months of the year; the chairman of the MTA - backed by the Tourism Minister in his column in The Sunday Times last week - replied that Malta is "suffering like other holiday destinations"; the MTA is in a "transitional year"; and everyone in the industry needs to "pull together" to improve the situation. SARAH PUNTAN-GALEA asked the MTA chairman, Romwald Lungaro-Mifsud for his views.

The tourism industry in Malta is in a fragile state. We are just days away from a long-awaited announcement about low-cost airlines - a decision that divides the MHRA, who are in favour, and the MTA, backed by the Ministry and Federation of Associations of Travel and Tourism Agents (FATTA), who believe that it could ruin the "bridges that have been built with other airlines over many years".

Besides, we have just witnessed a very public attack on the government, and the MTA, by Winston J. Zahra, former MHRA president, who blamed them for not just the industry's bad performance this year, but also for last year's figures - although 14,000 more tourists were recorded in 2005, actual revenue from tourism dropped by Lm5 million.

But why? Are we, as a holiday destination, pricing ourselves out of the market? How has this been allowed to happen - after the government has been applauded for taking tourism seriously in its Budget? Is Mr Zahra right to point fingers and complain? Does the future - after MTA's restructuring is complete - look brighter? Or are we the victim of a negative world tourism situation?

MTA's chairman, Romwald Lungaro-Mifsud, believes that the fact that as a small island which has to import almost everything, hinders our competitiveness against 'cheaper' destinations. And that we are not underperforming as a destination, but experiencing the same predicted drop in numbers forecast by the World Tourism Organisation (UNWTO). He is also optimistic that at the end of the current restructuring plan (agreed on in 2004 and implemented last year) we will meet Government's target of an additional 50,000 tourists a year, for the next three years. "Things don't happen overnight," he said, stating we are still a few years away from benefiting from the effects of this plan.

He also doesn't seem fazed after the recent rounds of vicious verbal tennis. "I met with the MHRA just yesterday," he told The Sunday Times on Wednesday. "It was a reaction by Mr Zahra to a tough winter; what was said reflected a tone of the moment. But he, like everyone in the industry, agrees that pulling together can make a change."

But teamwork, and an end to industry bickering, isn't enough of an answer for Mr Zahra to believe that things will improve. After he served his first attack, he volleyed back in the press a few days later to say that pulling together wasn't enough, and that the Authority should "save the marketing spin for marketing efforts overseas".

However it's the marketing, advertising, and sales efforts overseas that are one of the main tools that the MTA believe can dig us out of this tourism ditch - in fact money spent in this area has risen from 60 per cent of the MTA's budget in 2004 to 72 per cent this year. "We shut all our oversees offices, except in England and Germany, and replaced the other feeder countries with overseas sales agents. This saved money and made our operations more efficient."

Now the MTA are not so geographically focused, they can hone their tourist enticement down to specialised segments. "We have formed a Marketing Sales Directorate. Before the Authority was too top-heavy, but now there is just one board of directors, and we have an advisory committee for each of the seven new segments that represent each main area of Malta's tourism.

"The committee members are nominated by the industry themselves, and then four people are elected from within these segments to report to me. This input from the private sector is vital, the MTA exists because of the private sector."

The segments include: EFL (teaching English as a Foreign Language); MICE (meetings, incentives, conferences and events); History and culture; Tour operators and leisure; Gozo-based holidays; Sports; and Growth and other markets.

However although the restructuring plan is in full swing, the chairman still thinks that it's a little too early for a summer recovery, another concern voiced by Mr Zahra, who said that early summer bookings are down. "However this time last year, we saw the same situation. We were down 14 per cent in winter 2004/5 with negative forecasting, but then by last summer we had made a recovery and tourist numbers rose by six per cent, so we'll see what happens," Mr Lungaro-Mifsud said.

The MTA are also focused on a new, and uniform, branding image. "Before Malta was branding itself differently in different countries, from font, to colour, to image to even look and feel. Our competitors were projecting themselves in a cohesive manner, yet we were fragmented." Using a sole international advertising agency in each of the main country markets to push brand Malta should start from this summer.

So, is the reason for our 'disappointing' quarterly performance due to MTA's plan being in a transitional year? "It's easy to blame the interim period for disappointing figures, but it's a reflection of an international sluggish market from all source markets to all destinations. Our drop in numbers is in line with the forecast drop by the UNWTO, which reports that the Mediterranean area is having the lowest growth rates in the world at the moment."

Statistics show that Malta had a 4.9 per cent drop in January, whereas Cyprus experienced a 6.8 per cent fall and the Balearic Islands a 14.2 per cent decline.

"The gaining countries are from the emerging destinations in Eastern Europe and 'cheaper' year-round sunshine destinations like Egypt. Unfortunately, as a small country, we cannot enjoy the economies of scale these countries have. We have to import everything, including fuel to create our tap water, and food. Our labour and development costs are also much higher. Malta cannot be cheap."

However this doesn't mean that Malta will not regain numbers once the benefits of the restructuring kick in. "Once our branding is in place, and with our new cost-effective work practices, we can be a must-visit, value-for-money destination," Mr Lungaro-Mifsud said, adding that Malta has relied on tourism for so long that we have taken it for granted. "That's why we must all work together to fight the competition with a good brand. We have to look after our heritage gems, use EU funding to improve the environment, and we have to focus on service - a key factor for tourists to return. A smile costs nothing."

He concluded by saying that Mr Zahra, and the industry as a whole, shouldn't panic at the recent disappointing figures, and get disheartened that the situation is out of control. "We are still getting our fair share of tourists, and must stop trying to compete with cheaper destinations, but concentrate our efforts on offering tourists something special. I believe that the government target figures are achievable and we are going to try our hardest to meet them."

And when figures just released for last month show a 6.6 per cent rise over February 2005, the government targets now seem achievable... and when they are reached is when the industry will start smiling again.