Top performing Malta 'resilient enough' to face challenges ahead

The tourism industry witnessed a 3.8 per cent increase in arrivals last year, a record despite the impact of the global financial crisis that led to a downward trend in the last four months.

Figures released by the National Statistics Office show that Malta was one of the top performing Mediterranean destinations in 2008. Most of its competitors, with the exception of Turkey, suffered a dip in tourism.

Commenting on the statistics, the Parliamentary Secretary for Tourism, Mario de Marco said Malta is resilient enough to face the challenging times ahead in the tourism sector.

He said last year's figures had to be seen within the context of World Tourism Organisation's projections of growth of only two per cent. Malta nearly doubled this growth.

He said the challenges ahead lay in the fact that many airlines were consolidating or reducing their routes, and Malta's core markets were in recession. The WTO's projection was for negative growth this year.

Malta started the year well with a 23 per cent increase in January, climbing to a 27 per cent increase over Easter. May, June, July and August also saw increases in arrivals.

However, when the financial crisis surfaced in September, arrivals began to decrease gradually from 2.7 per cent that month to 9.3 per cent in October, to 10.8 per cent in November and to 12.4 per cent in December. Ryanair's decision to close its Valencia base at the end of the year also affected Malta significantly.

Notwithstanding the negative figures, when compared to the previous year, the last four months of the year saw a 16.5 per cent increase in bed nights. This means that the fewer tourists who were coming to Malta were staying longer.

However, in 2008 as a whole, the average length of stay decreased. The average of 9.5 bed nights in 2006 dropped to 8.9 in 2007 and down again to 8.7 last year.

In 2008, tourists spent over €1 billion on the islands, a decrease of 1.6 per cent over 2007. Per capita expenditure is estimated at €819, a drop of €50 when compared to 2007. Most of this is due to the shift from package holidays to independent travel, which shot up to 54 per cent last year from 45 per cent in 2007.

Moving away from package holidays was positive for larger and more organised hotels. Five-star hotels experienced an increase of 5.1 per cent followed by 1.1 per cent for four-star hotels.

On the contrary, three-star hotels witnessed a drop of nearly five per cent in their patronage, probably due to the fact that most still do not have a presence on the internet.

The UK remains Malta's main market with a share of over 35 per cent, followed by Germany, Italy and Spain. The British are also the biggest spenders in Malta with an estimated €336 million.

Nearly 88 per cent of all inbound visits originated from EU member states and 45 per cent came from the eurozone countries.

In percentage terms, Spain recorded the largest increase in 2008 with a 32.2 per cent growth in tourists over 2007. Decreases were recorded in the American, Scandinavian, Austrian and Swiss markets.

With regard to the frequency of visits, 68.7 per cent of those who came to Malta last year were first-time visitors and the rest were repeat tourists. Compared to 2007, first-timers rose by 5.1 per cent.

In terms of age, the largest age bracket comprised tourists between 45 and 64 years of age. Visitors under 25 increased by just under two per cent over 2007.

Factbox - Gearing up for 2009

The economic downturn, combined with the prevailing uncertainties, market volatility and a decline in consumer confidence make 2009 a challenging year for the tourism industry.

The economic recession in Malta's main markets, rising unemployment, uncertainty on the immediate future and the weak sterling are all complicating life for the country.

As a result, airlines and tour operators are cutting risks, and competing destinations are aggressively vying for decreased business.

In the face of these challenges, the Malta Tourism Authority is well geared for the year, with a number of marketing campaigns in place to promote Malta as a value-for-money destination. Price will again be a major determining factor in people's choice of holiday destinations.

All MTA's adverts include a price so that people can immediately know the cost of their holiday.

Its marketing strategy for this year revolves around two areas: the continued development of airline accessibility and a sustained promotional campaign that is sensitive to the needs of today's markets.

Last year was characterised by a shortage of airline seat capacity from the UK. The MTA addressed this, and in cooperation with Air Malta, sought to increase seat availability by the national airline.

This summer, Air Malta will, for the first time, be using all its 12 aircraft, (instead of the 11 it uses at the moment) on the Malta route and will increase the frequency of flights from Heathrow, Gatwick, Manchester, Moscow, Munich, Frankfurt, Malpensa, Zurich, Istanbul and Sofia. It will introduce routes to Verona, Stuttgart and Paris Charles de Gaulle airport.

Other airlines will also be offering new routes, Ryanair will fly from Trapani twice a week as from next month, increasing to four times a week in April. As from March, the airline will fly from Edinburgh twice a week and from Bristol twice a week from July.

Easyjet and SAS will fly from Newcastle and Stockholm respectively, from April, with twice-weekly flights.

Vueling and Clickair, which have merged recently, have confirmed their routes from the Spanish cities of Madrid, Barcelona and Valencia.

All these routes are expected to bring about 64,000 visitors to Malta.

In terms of marketing, MTA has prepared sales-driven adverts and television spots on top prime-time national stations, showing advantageous prices and the enhanced value of a Malta holiday.

MTA's marketing budget grew by €3.5 million for 2009. It will be increasing advertising in its core markets on the continent by an average of 50 per cent. For the first time, MTA will be running a television advert campaign, prepared by National Geographic, in France, Germany and Italy apart from the UK.

A number of public relations initiatives are also planned, with an estimated 300 travel journalists expected to be hosted in Malta.

With regard to conference and incentive travel, Malta has already experienced a number of cancellations for the first six months of this year. However, marketing campaigns to target businesses are under way.