Tourism is one of the crucial cornerstones of our economy. It deserves our full commitment. Equally it is a volatile sector which depends on various factors, some of them totally beyond our control. It requires constant and objective monitoring, as well as continuous planning ahead.
These thoughts came to my mind as I was looking at the latest tourism indicators on the basis of facts and figures published by the National Statistics Office.
Our latest tourism indicators refer to the number of tourists coming to Malta between November 2006 and March 2007, as well as to bed nights and level of expenditure over the same period, and then comparing those figures to the situation a year earlier.
An interesting picture emerges. When it comes to the number of tourists, we have had an increase of 6.3 per cent over the same period last year. Every month since November, we had more tourists than we did in the same month a year earlier. Translating percentages into figures, between November and April we had an increase of 23,356 tourists.
That is an encouraging indicator, but I can understand and appreciate the industry's call for higher growth. One of the reasons behind that call is that as far as the industry is concerned, it is more significant to consider the number of bed nights, rather than the number of tourist arrivals. A simple example explains why: if a hotelier has an empty room for a month, he would rather have one tourist who books in for the entire month, than three tourists who do a week each!
That brings me to the second tourism indicator. The total number of bed nights between November and April was marginally less than what it was a year earlier. There was a drop of 0.7 per cent, which in turn results from the average length of stay going down from 9.3 nights to 8.7 nights per tourist.
If this trend had to persist, the first seven per cent of growth in tourist arrivals is totally absorbed in making up for fewer bed nights.
Ironically, one of the major causes leading to a lower average length of stay by tourists in Malta is the introduction of low-cost carriers. Those using low-cost carriers typically spend less time in the country of their destination. Low-cost carriers operate on a business model that compares planes to taxis - a way of getting from point A to point B, and hence persons using them are tempted to take the flight for reasons varying from attending a friend's party to being present for a concert.
That leads me to another tourism indicator of relevance. What matters most is how much tourists are spending. Back to the simplistic example about a hotelier who has a free room for one month. He would rather have one guest checking in for the entire month, than three guests doing a week each, unless those three guests agree to pay him Lm20 a night, while the person wishing to spend a whole month does not want to spend more than Lm10 a night. In this case, the hotelier would make over Lm100 extra with three guests spending a week each, although the room remains unoccupied for an entire week.
What has been the situation between November and April? Looking again at the NSO figures, total expenditure went up by 6.8 per cent. That's an additional Lm8.5 million injected into our economy.
Indicators shift from month to month, and hoteliers are looking at other indicators that are not captured in the NSO data. They include their own levels of occupancy and how these vary across different hotel categories, and their gross operating profit. What is the return on their investment? How does it compare to the return made on other businesses, or to that made by their competitors in other countries?
While tour operator business is down, that related to travel by low-cost carriers is moving up. One need only read what The Daily Telegraph pointed out recently to find out that at the moment tour operators in the UK have so many empty seats that they are resorting to offering holiday packages for a few pounds sterling!
In Malta we consciously realised that we had to have low-cost carriers as part of the equation. That makes it more important for us to monitor and act on the shifting ground and trends within the industry. A drop in tour operator business to levels below that anticipated could affect volume of tourists coming over and certainly bed nights. How will it affect expenditure and other indicators?
The most important, I could add our 'bottom line', consideration is that as these trends shift, our marketing efforts need to be accentuated further. A major difference between the package visitor and the individual who resorts to the Internet to plan his holiday, is that you need more resources and creativity to reach out to the latter. More money is needed to make that happen, and Government, within reason, is determined to provide our ship sailing in the right direction with the additional fuel it now clearly requires - not only to maintain its present momentum, but also to pick up speed.
More low-cost
Low-cost carriers are carrying 44 per cent of all outbound traffic from the United Kingdom and 26 per cent of all outbound travel from Germany. These are our two main core markets.
Last year, four low-cost carriers started operations to and from Malta. Meridiana is operating flights from Bologna, Italy; Centralwings is operating from Warsaw in Poland; Germanwings from Cologne and Stuttgart in Germany, and Ryanair from Luton, Pisa and Dublin. To these should be added BritishJeT.com, which started its operations earlier carrying over 50,000 passengers from the UK.
On Thursday, I addressed a press conference at Malta International Airport on the occasion of the start of Click Air operations from and to Barcelona. Mr Cruz, CEO of Click Air, was present and expressed a desire to extend present Click Air operations in Malta. Another low-cost airline added to the network of airlines operating to our country is good news for our tourism industry.
Click Air will be operating twice weekly to Malta from this month to October with a capacity of 15,000 passengers both ways. It is estimated that this airline will be carrying this year over 5,000 passengers one-way - about 80 per cent of them tourists.
Doing us proud
What another wonderful experience!
On Friday we were proud to welcome among us one of the greatest voices of our times. José Carreras offered us much of his passion at a concert held just outside the Grand Masters' Palace.
NnG - as is typical of them - took all necessary steps to ensure a memorable evening. Making Malta events-oriented is one way how to develop better our tourism product. It was encouraging to see that among the 3,000 persons attending the concert were many foreign guests, some of whom were visiting our country for the first time. They booked the concert through the Internet and flew in to Malta specifically to attend this event.
It was moving to hear José Carreras pay tribute to our tenor, Joseph Calleja, who was present for the occasion. He dedicated a song to him and had already sung his praises a day earlier during a press conference.
The Grand Masters' Palace offered a backdrop that is characteristic of our capital city's baroque architecture as well as of our unique heritage. But our culture does not rest solely on our history.
Malta also has a vibrant contemporary artistes' community. On Friday our National Orchestra and one of our leading sopranos, Lydia Caruana, were doing us proud, as they teamed up with Carreras to offer us an incredible occasion.
Lydia's choice of repertoire was not easy but she did it with joy through a velvety voice that enchanted the audience. The National Orchestra conducted by José's own nephew David Giménez Carreras, excelled not only while accompanying the celebrated tenor and soprano, but also when interpreting such scores as the Intermezzo from Mascagni's Cavalleria Rusticana, and the one from La Boda de Luís Alonso by Gerónimo Jiménez.
My deepest gratitude to all those who worked so hard to make it happen.
www.franciszammitdimech.com, blog: http://franciszd.blogspot.com