Micromanaging our tourism industry
Our tourism industry has an urgent need for a shake-up to ensure that it continues to have a significant long-term future in our economy. Many are increasingly believing that no one seems to own the responsibility for reviving this industry.
While private operators often point their fingers at the government and the Malta Tourism Authority, the government often sees its role as merely that of a regulator and an enabler. Neither of these attitudes will ensure that we move out of the current slowdown as early as possible to see this industry grow again.
The realities facing this industry have been analysed at length by those involved in this industry. The countries from where our tourists come, Britain, Ireland, France, Italy and Germany, like us are going through a recession. The weakness of sterling against the euro is not helping either.
Air travel connected with international tourism has been forecast to fall by eight per cent during this year. The only area that is seeing a growth in tourism is the Middle East. Prospective tourists are increasingly foregoing their annual holidays to traditional tourist destinations or at least downgrading their plans by opting for lower cost destinations.
Should we despair in face of this bleak macro economic environment? Certainly not! Adopting a fatalistic attitude will only aggravate the problem. But one is astonished by the apparent lack of interest being shown by those in a position of authority to manage the microenvironment that affects our tourism industry. This is in sharp contrast to what other countries are doing.
For instance, while our ministry responsible for culture has introduced a new fees schedule with hefty increases for entry to museums and cultural sites, the tourism authorities of New York City adopted a very different strategy. To counter the drop in visitors the New York City tourism managers launched the NYC: the Real Deal - a value package aimed at easing financial pressures on visitors to the city.
Rather than an increase in museum fees, this American city offered a "buy-one-get-one-half-price" scheme that will enable tourists to mitigate costs of museum fees, Broadway shows, and even restaurants. This is what managing the microenvironment of tourism is about.
Other issues relating to the microenvironment are even more significant. The condition of our road network, the filth that still infests parts of the island, especially those more frequently visited by tourists, the slow progress in the implementation of transport reform, and the lack of coordination between the stakeholders in this industry are areas that need to be addressed with urgency.
These areas can only be addressed effectively if there is a strong political will to promote reforms that are based on long-term strategies as much as on short term tactics. We may not be able to do much to pull the countries on whom we depend out of the recession that they are facing. But we can certainly calibrate our tactics to mitigate the effects that rising costs and falling income is having on the pockets of those who may be interested to spend their holidays amongst us.
One fully understands the difficult situation being faced by the government in the management of public finances. But letting the industry fend for itself in the present crisis is a sure way of making future public finances management even more difficult.
Similarly private operators should shake off the culture of dependence on state aid to move out of the present crisis. They should introduce best-value packages for those considering visiting Malta to ensure that our product can stand up to the challenge offered by other destinations. This could well mean substantially lower profits for the next few years. But it also secures the long-term viability of their investment.
This season is increasingly becoming dependent on operators' ability to convince late bookers to choose Malta. Because we are not the only ones targeting late bookings, we have to upgrade our efforts to beat the competition. At the end of the day, tourists will pick up the best-value packages based on providing the best holiday experience for the lowest cost. This is why we need to manage the microenvironment of this important industry.