Minister calls for objective analysis of tourism

Tourism Minister Francis Zammit Dimech yesterday called for objective analysis of the state of the tourism industry, saying that although arrivals were expected to show a decline of some 50,000 this year, the situation was not as disastrous as some were making it out to be.

The minister was speaking in Parliament, which discussed and approved the budget estimates for his ministry.

Earlier in the sitting, Opposition tourism spokesman Evarist Bartolo said that what currently characterised this sector was the government's failure to achieve its targets.

Instead of the promised 50,000 annual increase in tourists, arrivals this year had already declined by 40,000. The promised new golf course had not materialised, nor had the new Internet portal. The Gozo helicopter service had been discontinued and Star Cruises would not home-port in Malta again next summer.

The Malta Tourism Authority was in a worse state than before its reform; the decision to close its overseas offices was being reversed, but the offices would now be staffed by foreigners.

Other tourism destinations around Malta were seeing growth, yet Malta was seeing its worst performance ever. Therefore the root of the local crisis was home-grown and did not stem from the international situation.

The government was not taking any effective action to remedy matters. There was no strategy for tourism to recover. Indeed the National Tourism Development Plan was a year late, as were the promised fiscal measures for joint ventures with the private sector to promote tourism. The Consultative Group on Tourism had submitted its recommendations, but these had not been published, let alone implemented.

Even basic action, such as cleanliness, was not in evidence, and building development was continuing to ruin the environment.

Mr Bartolo said it was not true that tourism had declined because of inadequate aircraft capacity. It was not seats that attracted tourists. Fewer aircraft were coming to Malta simply because demand had dropped, but airlines could quickly raise capacity as soon as demand increased.

New measures were needed to return Malta to competitiveness in price and value. Branding, advertising and subsidies to airlines were not enough.

The Labour MP said it was worrying how many hotels were closing down, and the salaries of workers in the tourism industry were not keeping up with inflation. Also worrying was the low morale and chaos in the MTA.

The government was showing itself to be out of touch, with the tourism minister as recently as April having said that arrivals were expected to increase by 40,000 in the second half of the year, when the opposite was the case.

Mr Bartolo said Malta needed an emergency plan to stem the decline in tourism, including better management of the beaches to blue-flag levels, the development of new beaches, better parking near the beaches and new forms of entertainment.

In Gozo tourism was in an even deeper crisis, and five hotels were being converted to apartment blocks. Here again the government lacked a proper, coordinated plan and the environment left much to be desired.

Several tourist areas in Malta too urgently needed a revamp, notably Bugibba, Mellieha, Marsaxlokk and Marsascala.

Mr Bartolo promised that a Labour government would coordinate its policies in favour of tourism, and it would use taxes as a way to improve competitiveness and not the other way around. Once the industry was restored, agreement would be sought with employers and unions to ensure good working conditions while competitiveness was maintained.

While the product and competitiveness needed to be improved the MTA also needed to place stronger emphasis on the potential of the Internet, including the chat sites where complaints, unless acted upon, could undo marketing campaigns.

The Labour MP also spoke on the MLP's policy document on tourism, saying a Labour government was promising fiscal incentives to the industry, better training to its workers, coordinated action among the various ministries to benefit tourism, modern marketing, closer collaboration with the private sector, a stronger voice for tourism in the EU institutions, an efficient MTA, effective regulation to ensure that the airport gave priority to national tourism needs, measures to promote the cruise liner industry and measures to attract more low-cost airlines without allowing any of them to assume a dominant position, as may already be happening.

Sectors which would be developed included historical sites and agro-tourism. Yacht marina and diving facilities would be improved, but harpoon fishing would be banned. Measures would also be introduced to attract more language students all year round, as well as more conference and incentive travel.

New tourism source markets would be sought, including the USA, South America and Asia, possibly also offering joint destination products with nearby countries. Concluding, Mr Bartolo said tourism was at a crossroads. It either renewed itself or it died. Earlier in the sitting, Joseph Cuschieri (MLP) said the budget speech for 2006 included the promises of a branding campaign, new golf courses in Malta and Gozo, new bays developed in partnership with the private sector and berthing facilities for cruise liners in Gozo.

Yet 12 months on the branding exercise had become an expensive farce, only one beach had been developed, and it was suffering sewage overflows. None of the other promises had been kept. There had also been spectacular mistakes, such as the decision, now being reversed, of closing the MTA's overseas offices, and the advertising campaign on CNN.

Last March Tourism Minister Francis Zammit Dimech had said this would be a good year for tourism, yet bed-nights had declined by 251,000 and spending by tourists declined by 0.4 per cent. Hotels had seen a slight increase in occupancy only because English language students moved in instead of living with host families.

The outlook remained negative, particularly for the winter.

Last Friday the Prime Minister had refused to admit responsibility for this failure, pointing his finger at taxi drivers and waiters, among others. This was not serious. What had the inter-ministerial committee on tourism, which he chaired, been doing?

Mr Cuschieri said the tourism industry was still heavily taxed, but despite this crisis museum prices had gone up even further in some cases.

The Labour MP said the Prime Minister should stop trying to deceive the people. At his own request, the people were judging performance in tourism by results. The opposition was prepared to work with the government to pull tourism out of this crisis, Mr Cuschieri said. Carmelo Abela (MLP) said that not enough was being done to promote Malta's cultural attractions among the Maltese and tourists, even though it was culture that gave Malta its identity. The Malta Council for Culture and the Arts had seen steep cuts in funding over the past two years and would remain at the current inadequate level for next year. So how could real progress be made in this sector? There had been a welcome increase in cultural activities this year, including Notte Bianca, but had they all been paid for? At last some VAT exemptions for cultural activities were being introduced for Gozo. Labour had been proposing this for years.

What had become of plans to amalgamate the boards of the Mediterranean Conference Centre, the Manoel Theatre and St James Cavalier? Would the fireworks festival be privatised? Indeed, was there a strategy for cultural activities?

Mr Abela complained that culture was not being given enough importance on state media. Money came first for PBS.

Would restoration works on the Manoel Theatre be continued next year? Were there any plans to improve Carnival, and would a Carnival Village ever be set up? What would become of the old opera house site in Valletta?

Mr Abela said more people needed to be attracted to St James Cavalier, where some good productions had been set up.

It was shameful that the Maltasong board had been confirmed despite the poor results that had been achieved, Mr Abela said.

Robert Arrigo (PN) said the MTA Internet portal should be of an informative nature, but he did not feel that bookings should be made through it.

If the MTA wanted to advertise on television, it should consider setting up a Malta satellite channel transmitting to different channels.

Mr Arrigo complained that criticism of the tourism sector in the media was harming Malta, and he could not understand how The Times allowed publication of certain letters.

The Nationalist MP welcomed the appointment of Sam Mifsud as MTA chairman, and said he had a difficult job which he was well suited to perform.

Mr Arrigo insisted that the MTA should not ignore foreign tour operators. Many operators felt ignored and their e-mails were not answered for months.

The MTA should be chasing the operators, not expecting them to be chasing it instead.

Mr Arrigo said the closure of foreign MTA offices was a mistake and their former employees should be sent back abroad.

On language studies, he said families were being underpaid when one considered what the schools charged. The families should consider setting up an association to get a better deal. He felt it was a mistake to accommodate language students in the same hotels as tourists.

Mr Arrigo welcomed the arrival of low-cost airlines and the discount schemes offered by Air Malta. Did it have to be Ryanair to move Air Malta to launch such schemes when there were 100,000 empty seats on its flights last year? Soon the difference between low-cost and ordinary airlines would narrow and Air Malta needed to be proactive to stay abreast of change.

There was now even a possibility that the arrival of low-cost airlines would result in a shortage of hotel beds. A measure which could be taken to avoid problems was to license families to host tourists.

The Nationalist MP asked if the MTA was working to attract new ferry operators from Sicily. Could the incentives to low-cost airlines be copied to such ferries?

The MTA had the tools and the funding to achieve results, but it needed to chase potential clients, not wait for them, Mr Arrigo said.

He noted that some museum tariffs had doubled. What was needed, he said, were better service and more convenient opening hours rather than higher entrance fees.

Tourism Minister Francis Zammit Dimech said it was wrong to give the impression that the tourism industry was in decline year after year. Arrivals grew by 3.4 per cent in 2004 and 1.3 per cent in 2005 for a total increase of 52,370 tourists. This year, unfortunately, arrivals were likely to decline by 50,000.

The minister said the MLP policy document on tourism did not offer solutions. For example, the document spoke on incentives to attract low-cost airlines to operate new routes. But what mix was Labour proposing? The party spoke on strengthening the role of Air Malta, without saying how.

Replying to questions by Carmelo Abela, Dr Zammit Dimech said the plans to amalgamate the boards of the Mediterranean Conference Centre, the Manoel Theatre and St James Cavalier had been stopped because of concerns that the three institutions would lose their autonomy.

He said the privatisation of the Jazz Festival had resulted in savings of some Lm35,000 to the government while attendance for the activity increased significantly. If this method could be copied for the Fireworks Festival, that would be done. A call for offers had already been made.

The government was committed to helping Carnival organisers with the aim of seeing this activity grow.

As for the Royal Opera House site, the plan was for it to be used for cultural activities, with a temporary roof set up for activities in winter.

Dr Zammit Dimech said some of the points made by Mr Bartolo were not even in the MLP's tourism document.

How, precisely, was the MLP proposing to attract more low-cost airlines to operate to Malta? How did it intend to attract more conferences to Malta? This year 65,000 conference delegates would have come to Malta, with this sector yielding Lm33 million. This market was growing every year.

Dr Zammit Dimech said there had been no government intervention for the MTA to hold an advertising campaign on CNN. Still, CNN had a huge audience. And it was worth noting that the Malta advertising was on CNN Europe and North Africa, not the US.

Referring to host families, Dr Zammit Dimech said he had himself urged the families to set up their association. It was also worth noting that tax-free thresholds were introduced some months ago, and exemptions for social security obligations were also introduced in this budget.

The MLP was saying that taxation would be used as a tool to make tourism competitive. Here again, what was the MLP proposing exactly, and how did it tally with EU rules?

The minister said the current state of the tourism industry should be analysed objectively. The situation was not as disastrous as it was being made out to be, even though this debate was being held on Halloween night.

Giving some figures, the minister said that between January and September the number of arrivals had declined by 41,000 and bed-nights dropped by 251,000. The average stay had improved marginally to 9.6 nights. Earnings from tourism had dropped by 1.2 million, but per capita tourist spend was up by Lm16.

The number of cruise passengers grew by 79,700. This was significant because of the changing trends in tourism. In the same context, 3,000 more Maltese took their holiday on cruise ships this year.

Turning to low-cost airlines, Dr Zammit Dimech said that when the government announced its scheme to attract low-cost airlines, the opposition said it would fail. Yet even as he was speaking two Ryanair aircraft were on their way to Malta and other airlines too were coming to Malta. The government had stood firm and had managed to attract low-cost airlines without become dependent on them. What would Labour have done differently?

Dr Zammit Dimech observed that one of the main reasons for the decline in arrivals in Malta had been a 45,000 drop in British travellers. Yet one could see how half of British travellers planned their trips on Internet and over 40 per cent used low-cost airlines. Malta, therefore, had been losing out. At the same time British tour operators, which were important for Malta, had run into difficulties across their business. Still, talks with the operators were continuing and Thomas Cook would even bring its senior management and staff to Malta for a conference of 2,000 delegates. MyTravel had also announced it would expand its programme to Malta.

Dr Zammit Dimech said the incentives issued by the government did not differentiate between airlines, and he therefore welcomed initiatives taken by Air Malta, including a new service to Liverpool.

Labour had first said that attracting low-cost airlines was a shortsighted policy, then it had changed its position completely.

Similarly, Mr Bartolo claimed that a drop in arrivals was not caused by low airline capacity on some routes, yet in April he told a newspaper that hundreds of Germans had not come to Malta because there were not enough airline seats.

Clearly the opposition was not just making u-turns. It was on a roundabout.

The opposition speakers spoke on hotels closing down, but what about those which were opening or expanding, for a total investment of Lm21 million? Full- and part-time employment in tourism had actually increased this year.

The government was also investing heavily in tourism. This budget allocated Lm15.6 million directly to tourism - 40 per cent more than last year. These would go for product development, marketing and training. Funds from the EU would be used for the upgrading of beaches and coastal areas, cultural and heritage sites. Tourism would also benefit indirectly from the heavy spending being made on the environment, the roads, Gozo and the infrastructure.

Reacting to questions on the activities of the inter-ministerial tourism committee, Dr Zammit Dimech said it had been very important for decision-making on low-cost airlines, the extensive clean-ups and upgrading of tourist areas before the summer, the development of the national tourism policy, work on the Gozo ferry terminals and product development.

Dr Zammit Dimech said the National Plan on Tourism would be published by the end of this year. Its publication had been held back to include recommendations by the consultative group (of tourism industry leaders) appointed some time ago.

Turning to culture, the minister praised Heritage Malta for its sterling work, such as lectures, exhibitions and the project for the better preservation and presentation of Mnajdra and Hagar Qim Temples. This project would be concluded by early 2008 when both temples would be covered. Other works included upgrading at the Inquisitor's Palace and the Maritime Museum and a visitors' centre at Ggantija. The Superintendence of Cultural Heritage had also been very active, notably in compiling an inventory of Malta's treasures. Fondazzjoni Patrimonju Malti would next year complete the restoration of Palazzo Falson.

St James Cavalier had become a useful instrument for the promotion of contemporary art.

The minister said Notte Bianca had been a huge success, drawing 100,000 people who could admire the beauty of Valletta and the talents of Maltese artistes. This was a milestone event which would be repeated. Also very successful was the Arts Festival, which had centred on the opera house ruins and Freedom Square. The 191 children's art exhibition would be inaugurated shortly and would visit various European capitals. A cultural sponsorship fund would be launched next year to encourage private-sector sponsorship of cultural events.

On the cultural content of PBS, Dr Zammit Dimech said that over the past year the government had allocated funds for this purpose, and this was being used on Maltese drama and children's programmes. The situation was being monitored.

Concluding, the minister said the people should add value to their country and speak well of it. The initial purpose of the branding exercise was precisely to make the people proud of their country. Criticism should be fair and objective and should not be carried across the four winds, because that was detrimental.