High prices 'hamper' tourism

Malta's travel and tourism competitiveness is being hampered by high prices and air transport accessibility, a major international report released yesterday has shown.

Nevertheless, Malta ranks in 26th place among the 124 countries surveyed in the World Economic Forum's (WEF) first-ever Travel and Tourism Competitiveness Report.

The placing puts the island above countries like Italy, Croatia and Ireland but below competing Mediterranean countries such as Spain, Cyprus and Greece.

Switzerland, Austria and Germany have the best competitiveness overall, with Burundi and Chad placing bottom.

The index is not a "beauty contest", or a statement about the attractiveness of a country, WEF senior economist Jennifer Blanke explained, but it measures the factors that make it attractive to develop the travel and tourism industry of individual countries.

The Travel and Tourism Competitiveness Report is derived from factors like policy rules and regulations, ground transport infrastructure and natural and cultural resources.

The main drivers of competitive advantage for Malta are the prioritisation of travel and tourism due to the extensive budgets granted by the government to tourist authorities; safety and security due to low levels of crime; and health and hygiene due to the high density of physicians.

Malta places among the top in sectors like the presence of major car rental companies and education enrolment.

The island's competitive advantage is extensively eroded by low rankings in areas like environmental regulation mainly due to the level of stringency, clarity and stability of environmental regulations.

The WEF ranks Malta's effectiveness at marketing and branding at 55 among the 124 countries surveyed.

In the area of business environment and infrastructure, the main drivers of competitive advantage are ICT infrastructure (11th place) and tourism infrastructure (12th place) resulting from the strong penetration of ICT and hotel rooms respectively.

On the other hand, Malta's competitive advantage is dealt a blow due to price competitiveness (109th place); high inflation and airport tax (118th); ground transport infrastructure (60th); lack of proper public transport facilitates and air transport infrastructure (42nd), resulting primarily from the number of airlines operating to Malta.

Malta's competitive advantage is boosted by its openness and attitude towards tourists, though the quality of service delivery by front-line people in the industry leaves much to be desired.

When contacted, WEF senior economist Irene Mia said Malta is doing extremely well in a number of key areas for competitiveness, such as tourism infrastructure and safety and security. Nevertheless, the island needs to do something especially with price levels if it is to progress into the top 20, she added. These include prices affecting tourism and the general cost of living.

Competitive Malta, a WEF partner institute, said it is evident Malta will be facing stiffer competition from its main rivals unless it succeeds in mitigating its competitive disadvantages that relate to the lacking quality of the preservation of natural and cultural resources, the effectiveness of marketing and branding campaigns, air transport accessibility and, in particular, the lack of price competitiveness.

The report particularly highlights Switzerland's success at taking the leading position in the rankings, applauding its safety factor, its health and hygiene indicators, and its effective environmental regulation.

Switzerland is home to six World Heritage sites, a significant number for such a small country, and nearly 30 per cent of the land area in the country is protected.