Avoiding the tourist trap

Tourism Parliamentary Secretary Mario de Marco is concerned about prospects for the sector in winter. He also tells Herman Grech that construction regulations - and mentalities - have to change.

Tourism prospects for winter do not appear to be rosy, with the Malta Tourism Authority projecting a shortfall of 25,000 airline seats. Are you concerned?

It is of concern because accessibility is one of the key factors to guaranteeing tourism success. Let's not forget however that the whole industry in general is facing serious problems internationally. The reduction in seat capacity is mainly due to external factors - we have the problem of fuel prices, especially for those carriers that have to fly for over two-and-a-half hours. A number of airlines are saying the breakeven point in this scenario is a 110 per cent load factor.

The MTA is seeking to address this issue by keeping in constant contact with various carriers to encourage them to open new routes, or strengthen successful existing routes either by slotting in additional flights or using larger aircraft. Moreover, the MTA will be having a more focused marketing campaign. Even though we had fewer flights last July than last year, we still succeeded in increasing tourist arrivals by nearly two per cent.

The government has limited muscle with foreign airlines, which is not the case with Air Malta. Do you think it was a good idea for Air Malta to axe the Glasgow route?

From a tourism point of view, it was certainly not a good idea and it has hurt us. But the national airline cannot ignore state aid regulations. A national airline today has to be independently viable. Glasgow is beyond three-hours flying distance. However, following talks with Air Malta, we have been assured that it will operate a weekly charter flight from Glasgow to Malta, stopping in Newcastle. If there is sufficient demand from tour operators, there will be a direct weekly charter both from Glasgow and Newcastle throughout the winter.

The value of the sterling is down, the UK is experiencing a credit crunch and there's talk of a recession. Aren't you worried about these developments in what is essentially our core market?

Certainly. There was a 68 per cent increase in domestic tourism in the UK this summer, which reflects change in their travelling patterns as a direct result of the credit crunch. Nevertheless, to date we have more or less managed to retain the UK market. In fact, the load factors for flights from the UK this summer have been above 90 per cent.

Operators insist that every penny spent on promoting Malta yields a much higher return. Will you be pushing Cabinet for a bigger marketing budget?

The budget for MTA has increased progressively over the past few years, reaching €23.3 million (Lm10 million) last year. I wish I could have a larger budget not only for marketing, but also for product development, but I have to be realistic. It's not necessarily always a matter of increasing the marketing money, but rather marketing more effectively. A person hit by a recession will not go on holiday simply because he saw a holiday advertisement three times as opposed to two...

Do you think the MTA's marketing has been effective?

Yes. Over the past seven months, we've had an increase of 11.9 per cent in terms of tourist arrivals compared with last year, which was a record year.

MTA's sponsorship of Sheffield United has been described by some as a waste of money. Do you agree?

I don't think it's a waste of money if we manage to take full advantage of the exposure it can give us. It's a matter, however, of weighing everything. I would ask if it's the best use of MTA's money. When I posed the question to the MTA, I was told they believe it is an effective way of reaching out to the British market.

Did they convince you it was a good deal?

I'm convinced that we have good people whose advice I can rely on.

Do you think Malta's introduction of the euro has exposed how expensive our country actually is?

We're more expensive in some respects, while in others we still provide value for money. I think that restaurant prices are going up and foreigners can now easily make comparisons. We're also seeing accommodation prices increasing - MHRA figures for the second quarter show that the average achieved room rate has increased over the same period last year. Of course it's healthy that hotels are generating more revenue compared with the past. But we have to be very careful.

Do you fear that we're pricing ourselves out of the market?

We're still giving good value for money, but we have to be careful. If you had to compare the Maltese prices with those for example in Tunisia or Turkey, then we're more expensive. But do we have to compare ourselves only in terms of price? We have to compare the entire experience and package, and determine if what we offer is good value for money.

But if hotel prices and restaurant prices are increasing, we're talking of two essential tourist commodities.

It is dangerous and that's why we have to be cautious and always remind operators that nobody owes us a living. If we are to be successful, we have to offer good value and a good service.

Low cost airlines have become the buzz term of the tourist industry. How has your relationship with the operators of these airlines been since you've been in office?

They've made a significant contribution towards the success of last year and this year. Fine, they're out there to make money, and they are demanding - but that's to be expected. They have a business to run and it's not easy in the circumstances.

Are you convinced that low cost airlines are here to stay?

I think that they're here to stay as long as our tourism grows. They're not here to be nice to us. They will move on the minute they realise our industry is not growing. We don't want low cost airlines to be present simply to ensure more Maltese travel from Malta to other destinations, but more significantly we want more foreigners to come to Malta.

We keep hearing about low cost operators making all sorts of demands, others threatening to pull out. Is this correct?

I can't say it's completely true. When low cost airlines want to pull out, they will. Germanwings pulled out of Cologne and Stuttgart because it was reducing its flights around Europe as a result of fuel costs. I can't say (low cost airlines) have made excessive or unrealistic demands.

Some would say Ryanair has made outrageous demands. The airline has been very outspoken about its requests.

Ryanair enjoys being outspoken but I wouldn't say it has been unreasonable. We've had a healthy discussion with them - it's given an excellent service to Malta. Ryanair is flamboyant. It enjoys teasing the others.

Has it tried to milk out more financial support from the government?

We've had discussions but I wouldn't say it's an issue of demanding more money.

Has Ryanair threatened to pull out of the Malta-Pisa route?

No, but it stopped the Bremen route following the closure of its base there. Hopefully, it will be flying to Bari this winter instead.

The government is providing financial assistance to low cost airlines. Is it worth it?

So far it is because they are bringing in the numbers. It wasn't a mere coincidence that we had a record year in 2007 and it seems like we'll have a record year too in 2008. Let's not forget we used to give a lot of support to the tour operator before.

In 2008, Malta still has one of the most expensive taxi services, our bus service is unreliable, and public transport from the airport is inconvenient. When are we going to put our house in order with the most basic services?

The events we experienced in July were precisely the result of the government wanting to put our house in order in the public transport area. Public transport needs to make that qualitative leap. Our public transport, on the other hand, provides a service at a cheap price. If you compare what it costs you to get a bus overseas it is definitely much cheaper here...

... but here you run the risk of the bus not turning up.

Precisely. This is where we have to improve. I'd love to see a schedule at each bus-stop indicating precisely what time the bus will arrive.

Why does it have to take so long?

In Malta things do seem to take a while. But times have changed, the economy and the mentality have changed. People are realising that it's not healthy to have a protected public transport or any protected industry at that. The MTA provided training for taxi drivers to improve their approach to tourists. Have we succeeded? I think we have a lot more work to do.

Did you cost the damage to the tourism sector after the July transport strike?

It's difficult to cost it but there has been a lot of damage to reputation. The government forked out an emergency additional budget of €100,000 and MIA injected an equivalent amount in marketing to seek to undo the damage.

It might be a cliché, but we are still finding one-star environments outside five-star hotels. Malta has increasingly turned into a big concrete jungle, with modern structures eclipsing our historic buildings. Is it a question of enforcement or are we just not bothered about the environment?

We definitely need to redraft our construction regulations. It's unacceptable that even within tourism zones construction can take place from 7 a.m. till 8 p.m.

But the regulations exist.

With the new regulations introduced a couple of years ago, there has been a big improvement - excavation and demolition cannot take place in tourism zones between July and September. But other forms of construction may still take place from 7 a.m. till 8 p.m. I think that the hours are too long. So we have to move towards extending the nature of works which should be banned from tourism zones during the peak summer months and limiting the hours during which permitted works can take place in tourism zones.

Have you made a formal proposal?

I've discussed it with Infrastructure Minister George Pullicino and he's in the process of redrafting these regulations. We can't have people staying in a hotel in the peak season and have loud works taking place right next door. Yes, Malta has become a construction site - what concerns me is the question 'what is Malta?' There are too many areas with Maltese characteristics, which are today changing. If you look at St Julian's - it used to attract people because it was a quaint fishing village...

...and now you see blocks of apartments.

Precisely. Apartments may be convenient and attractive in their own way, but is St Julian's the same quaint fishing village we had 20 years ago? Certainly not.

Is it too late for other places?

If we see what happened in Lija, it's not too late. I sincerely believe that with the right mentality, pressure and forward planning there is still a lot of the identity of Maltese villages we can safeguard.

My wish is to get tourists to move on from the general tourism zones as we generally know them and experience the inner core of the typical Maltese village. If you look at the beauty of the core of Żebbuġ, for example, there's so much history around it. I'd like to see more pedestrianisation of squares and old lanes in places like Żejtun, Siġġiewi, Għargħur and the Three Cities. We need to provide tourists with the authentic Maltese experience.

Are you prepared to publicly condemn construction projects which are out of line?

We will be assessing every tourism application in a different light. It's a mistake to take away the environmental aspect from tourism applications. Environment and tourism have to move hand in hand. We have to see if proposed new hotels are designed in an environmentally-sensitive way.

What you're saying runs at a tangent with what the MTA chairman recently said in court about the controversial Mistra project. He said he had made his recommendations for the project purely from a tourism point of view without considering the environment, which fell within the remit of another organisation. You're saying one thing, and the MTA chief is saying another.

No, we're not exactly saying different things. The MTA chairman was talking about the past. I am talking about the present and the future. I want it to make it very clear that within three days of my appointment as Parliamentary Secretary I had a meeting with the MTA chairman and made it clear to him that the environment has to be considered in all tourism development applications processed by the MTA.

The authority can't simply see things from a blinkered tourism perspective. The MTA can't just accept applications for discos, hotels or village resorts without seeing the context of the area of the application... Sam Mifsud's testimony referred to an application lodged in December last year. Today the situation is totally different.

Alternattiva Demokratika was among the organisations which said that Sam Mifsud's position is untenable.

I would say it would become untenable if he doesn't follow my directive - I'm assured he has understood what my directive is.

Have the hotel operators understood it?

I hope they do... it's in their interest.