Cost benefit analysis for tourism
The Maltese tourism sector is certainly at the forefront of the Euro changeover project. The gross foreign exchange earnings from tourism amount to around €620 million, of which an estimate €310 million come from the euro area countries.With our...
The Maltese tourism sector is certainly at the forefront of the Euro changeover project. The gross foreign exchange earnings from tourism amount to around €620 million, of which an estimate €310 million come from the euro area countries.
With our adoption of the euro next January the tourist industry is going to gain from a cost savings of over €6 million on foreign exchange transaction costs. Furthermore, the cost of financing both recurrent and capital financial requirements is expected to decrease by 25 basis points when our interest rates converge with those in the eurozone on January 1, 2008.
On the other hand, our tourism industry is expected to face a further increase in competition with other tourist destinations due to increased price transparency.
With the current pegging of the Maltese lira to the euro and eventual euro adoption, the pricing of our tourism products is heavily influenced by the euro /US dollar and the euro/pound sterling exchange rates. In the last few weeks, the euro has registered significant gains against the US dollar. As a result of this, European holiday makers are finding holidays in the United States more attractive when compared to Mediterranean destinations.
As our tourism sector gears up for the adoption of the euro, it is important that the industry in collaboration with local authorities focus on decreasing their cost structures and increasing revenue generation. Furthermore, the tourist sector needs to move up the value chain through diversification and niche marketing.
• Mr Cassar Torreggiani is the executive head responsible for the euro changeover programme at Bank of Valletta.
http://www.bov.com
With our adoption of the euro next January the tourist industry is going to gain from a cost savings of over €6 million on foreign exchange transaction costs. Furthermore, the cost of financing both recurrent and capital financial requirements is expected to decrease by 25 basis points when our interest rates converge with those in the eurozone on January 1, 2008.
On the other hand, our tourism industry is expected to face a further increase in competition with other tourist destinations due to increased price transparency.
With the current pegging of the Maltese lira to the euro and eventual euro adoption, the pricing of our tourism products is heavily influenced by the euro /US dollar and the euro/pound sterling exchange rates. In the last few weeks, the euro has registered significant gains against the US dollar. As a result of this, European holiday makers are finding holidays in the United States more attractive when compared to Mediterranean destinations.
As our tourism sector gears up for the adoption of the euro, it is important that the industry in collaboration with local authorities focus on decreasing their cost structures and increasing revenue generation. Furthermore, the tourist sector needs to move up the value chain through diversification and niche marketing.
• Mr Cassar Torreggiani is the executive head responsible for the euro changeover programme at Bank of Valletta.
http://www.bov.com