Crossing lines over tourism
Tourism refuses to stay out of the news, adding credence to the media belief that bad news is good news. Within the span of a few days the rolling average of news that the industry could do without tends to rise, rather than diminish. The headlines...
Tourism refuses to stay out of the news, adding credence to the media belief that bad news is good news. Within the span of a few days the rolling average of news that the industry could do without tends to rise, rather than diminish. The headlines that have come out so far this month topped stories that at the very best were mixed. The reports that the almost brand new CEO of the Malta Tourism Authority had resigned have not dug very deep into the reason why.
It was barely a couple of months ago that the CEO and the MTA chairman had come out in tandem to say how well they were working together, and to claim credit for beginning to turn the industry around. Since then there had been suggestions that the two gentlemen were not getting along as swimmingly as projected, was expected and, more important, required. In fact, at a time it was indicated that they had fallen out though, apparently, not about strategy.
Worse than that for the departed CEO, it was suggested that he was not in the library of the Minister for Tourism, let alone in his good book. That good book had held a special place for the previous CEO, who had also held the position of chairman, in contradiction to the government's policy to keep the two functions separate in public entities. That particular gentleman, it was said, had been handpicked by the minister. Not quite so the more recent CEO who served a very truncated term.
That particular suggestion was borne out by the alacrity, almost grim satisfaction, with which the Tourism Minister announced that the latest CEO's resignation had been accepted. That almost confirmed that, had he not resigned, the CEO would have been sacked. I find that unlikely, because - unless there was some just cause unknown to the public - had the CEO's contract been terminated he would have been entitled to compensation. The government, specifically the minister, had been down that road before and the fresh flak would have been very bad.
Whatever the true background, by leaving on his own steam the ex-CEO did the minister a favour. By removing himself he removed a bug from the minister's saddle and he also saved him fresh embarrassment of the old type (hefty compensation for services not rendered). Or did he? The minister may ride more easily towards the sunset, but he must be embarrassed. He plays a hands-on role in regard to the Malta Tourism Authority. The minister doesn't just advise the Prime Minister whom to appoint on the authority's board, after he sounds out various individuals himself regarding who to consider. He then involves himself, rather than letting the MTA get on with implementing the policy set out by the government after listening to the advice coming from those who understand the industry slightly more than transiting politicians.
As a result the minister is not only held accountable for the performance of the industry. He also gets spattered with eggs broken within the MTA, like when the chairman felt he could not accept apparent leaks and uttered words which led to the resignation of various individuals from the board. Not that getting spattered yesterday and having the CEO post vacant yet again today trouble the minister unduly. He is a remarkable political survivor. He has the good ear of the Prime Minister, who has stood by him through thin and thin, resisting open calls to put him out to grass or restrict him in some area other than tourism. The minister has also survived years of bad results. He is still in the saddle now that arrivals have turned round and there is a considerable year-to-year increase. That, the minister claims, is due to the sound and steadfast policies determinedly followed under his brief.
The turnaround is not quite as good as it seems, which the minister had the character to acknowledge in his Sunday Times column of a fortnight ago, rather than sticking to the hype and spin prevalent in the Nationalist media. Arrivals are up, and so is estimated spending. But more tourists spent fewer days here, overall, leading to a drop in bed-nights, a key measure. There is in play another weak point which was not highlighted by the minister, but had been pointed out clearly enough by the CEO of the Malta International Airport company.
It concerns seat capacity. Up to last year the industry would complain that seat capacity relative to potential demands had shrank. Now it has increased by around a fifth, but arrivals had risen by only a quarter of that. The implication is that carriers have too much spare capacity. If that is not filled, and quickly, some low cost airlines, re which the Minister claims credit, might rethink their position, starting with asking for more like the still-hungry Oliver Twist.
The answer, the MTA chairman suggested over the weekend, lay in more advertising. That coincided with ministerial satisfaction that the government will, in fact, be forking out more euros to promote Malta. That includes putting money behind a lush MTV show, part of which will go into advertising to be repeated in carefully chosen months. Whether the MTV audience is the right market at which to throw public money remains to be seen. Presumably the MTA tracks the outcome of its various advertising campaigns. Such outcome would be lagged, but should start to become visible from one to two years on.
The thing about politics, policies and the private sector is that when results start coming, in or do not come in as expected, the politicians in charge of the sector will have long gone. That is why policy and such political management as has to take place have to be as sound as possible. It is not at all certain that requirement is being met, though policymakers and the industry alike are taking note of the shifting structure of international tourism. The growth of internet packaged tourism is at the centre of the restructuring.
The MTA and the ministerial, like hoteliers, must be relieved that the dependency on tour operators is decreasing. Yet account has to be taken of the fact that the decrease leads to lower seat capacity in that sector. That, the Minister will correctly point out, is made up by the low cost airlines. They, the CEO of Malta International Airport will reiterate, need to fill up much more than they are doing. Advertise! the MTA chairman will chip in, Advertise more!
In all this, who will construct policy on an ongoing basis to adjust to developments and events? Market segmentation is an operational problem, which is what good managers exist to tackle. Policy management segmentation is a bigger problem, and that is what the industry is facing. There are: the Prime Minister's ministerial unit; the minister and his team; the MTA (at the moment rudderless and with the minister scratching to short list new candidates for the CEO post); and the private policy group, who are in a grey area behind the scenes, not far from the Prime Minister's lobby.
Who, exactly, is in charge? There has to be a running collective effort and all those who can contribute positively should be given the opportunity to do so. But crossing lines is not a risk that should be run if the tourism industry is to have the macro focus that it requires.
It was barely a couple of months ago that the CEO and the MTA chairman had come out in tandem to say how well they were working together, and to claim credit for beginning to turn the industry around. Since then there had been suggestions that the two gentlemen were not getting along as swimmingly as projected, was expected and, more important, required. In fact, at a time it was indicated that they had fallen out though, apparently, not about strategy.
Worse than that for the departed CEO, it was suggested that he was not in the library of the Minister for Tourism, let alone in his good book. That good book had held a special place for the previous CEO, who had also held the position of chairman, in contradiction to the government's policy to keep the two functions separate in public entities. That particular gentleman, it was said, had been handpicked by the minister. Not quite so the more recent CEO who served a very truncated term.
That particular suggestion was borne out by the alacrity, almost grim satisfaction, with which the Tourism Minister announced that the latest CEO's resignation had been accepted. That almost confirmed that, had he not resigned, the CEO would have been sacked. I find that unlikely, because - unless there was some just cause unknown to the public - had the CEO's contract been terminated he would have been entitled to compensation. The government, specifically the minister, had been down that road before and the fresh flak would have been very bad.
Whatever the true background, by leaving on his own steam the ex-CEO did the minister a favour. By removing himself he removed a bug from the minister's saddle and he also saved him fresh embarrassment of the old type (hefty compensation for services not rendered). Or did he? The minister may ride more easily towards the sunset, but he must be embarrassed. He plays a hands-on role in regard to the Malta Tourism Authority. The minister doesn't just advise the Prime Minister whom to appoint on the authority's board, after he sounds out various individuals himself regarding who to consider. He then involves himself, rather than letting the MTA get on with implementing the policy set out by the government after listening to the advice coming from those who understand the industry slightly more than transiting politicians.
As a result the minister is not only held accountable for the performance of the industry. He also gets spattered with eggs broken within the MTA, like when the chairman felt he could not accept apparent leaks and uttered words which led to the resignation of various individuals from the board. Not that getting spattered yesterday and having the CEO post vacant yet again today trouble the minister unduly. He is a remarkable political survivor. He has the good ear of the Prime Minister, who has stood by him through thin and thin, resisting open calls to put him out to grass or restrict him in some area other than tourism. The minister has also survived years of bad results. He is still in the saddle now that arrivals have turned round and there is a considerable year-to-year increase. That, the minister claims, is due to the sound and steadfast policies determinedly followed under his brief.
The turnaround is not quite as good as it seems, which the minister had the character to acknowledge in his Sunday Times column of a fortnight ago, rather than sticking to the hype and spin prevalent in the Nationalist media. Arrivals are up, and so is estimated spending. But more tourists spent fewer days here, overall, leading to a drop in bed-nights, a key measure. There is in play another weak point which was not highlighted by the minister, but had been pointed out clearly enough by the CEO of the Malta International Airport company.
It concerns seat capacity. Up to last year the industry would complain that seat capacity relative to potential demands had shrank. Now it has increased by around a fifth, but arrivals had risen by only a quarter of that. The implication is that carriers have too much spare capacity. If that is not filled, and quickly, some low cost airlines, re which the Minister claims credit, might rethink their position, starting with asking for more like the still-hungry Oliver Twist.
The answer, the MTA chairman suggested over the weekend, lay in more advertising. That coincided with ministerial satisfaction that the government will, in fact, be forking out more euros to promote Malta. That includes putting money behind a lush MTV show, part of which will go into advertising to be repeated in carefully chosen months. Whether the MTV audience is the right market at which to throw public money remains to be seen. Presumably the MTA tracks the outcome of its various advertising campaigns. Such outcome would be lagged, but should start to become visible from one to two years on.
The thing about politics, policies and the private sector is that when results start coming, in or do not come in as expected, the politicians in charge of the sector will have long gone. That is why policy and such political management as has to take place have to be as sound as possible. It is not at all certain that requirement is being met, though policymakers and the industry alike are taking note of the shifting structure of international tourism. The growth of internet packaged tourism is at the centre of the restructuring.
The MTA and the ministerial, like hoteliers, must be relieved that the dependency on tour operators is decreasing. Yet account has to be taken of the fact that the decrease leads to lower seat capacity in that sector. That, the Minister will correctly point out, is made up by the low cost airlines. They, the CEO of Malta International Airport will reiterate, need to fill up much more than they are doing. Advertise! the MTA chairman will chip in, Advertise more!
In all this, who will construct policy on an ongoing basis to adjust to developments and events? Market segmentation is an operational problem, which is what good managers exist to tackle. Policy management segmentation is a bigger problem, and that is what the industry is facing. There are: the Prime Minister's ministerial unit; the minister and his team; the MTA (at the moment rudderless and with the minister scratching to short list new candidates for the CEO post); and the private policy group, who are in a grey area behind the scenes, not far from the Prime Minister's lobby.
Who, exactly, is in charge? There has to be a running collective effort and all those who can contribute positively should be given the opportunity to do so. But crossing lines is not a risk that should be run if the tourism industry is to have the macro focus that it requires.