Editorial

The performance of the tourism industry is being measured mainly by analysing the number of visitors in a given period and comparing the figures with those of a previous period. This practice is not unlike judging the performance of a car by looking solely at the mileage counter, and ignoring the petrol gauge, the speedometer, the warning lights and other instruments that monitor the vital functions of the vehicle.

The Malta Hotels and Restaurants Association is not satisfied with this superficial and inaccurate way of measuring the impact of tourism on Malta's economy. It is calling for the National Office of Statistics to introduce a new set of dashboard indicators that can gauge better the full economic impact of this most important industry that contributes about a quarter of the country's GDP.

The practice proposed by the MHRA of establishing a tourism satellite account to capture all the different economic facets of the hospitality industry is very widespread in Europe - 17 EU countries already adopt it. It is a method approved as best practice by the World Tourism Organisation, the United Nations and the Organisation for Economic Cooperation and Development. The main advantage of the system is that it would help all stakeholders in the industry to understand the broad impact of tourism on the national economy.

The MHRA has described as "not good news" the fact that the government only intends to introduce "partial satellite accounting" by 2012. It obviously sees a risk that this will perhaps amount to doing too little too late. It rightly points out that one of the objectives of this method of capturing more comprehensive tourism-related economic data is to help in the planning process that needs to be increasingly accurate and focused. This is more relevant at a time when international competition in this sector is becoming intense and "tourism patterns and trends are changing dramatically".

Another reason why more detailed analysis of the impact of tourism on the economy is needed is related to the importance of benchmarking performance with "the best of breed". These can serve as a model to help Malta optimise its efforts in promoting services successfully to tourists.

The multiplier effects of tourism on other sectors of the economy are also so important that, if not measured, stakeholders risk misinterpreting the economic effects brought about by the complex dynamics of the industry.

The MHRA raised another valid point regarding the importance of hitting the Vision 2015 targets. Vision statements about promoting Malta as a centre of excellence for tourism can only be realised if they are accompanied by detailed action plans on how the country intends to achieve its aims and an ongoing objective analysis of the results achieved in the course of implementing such plans.

The method used to gauge performance in tourism is deemed to be unsatisfactory. Relying on an analysis of the numbers of visitors and measuring only the value added of hotels and restaurants, while ignoring the value that tourism brings to other economic sectors, is no longer tenable.

The appeal of the MHRA to the NSO to create the data mining tools that will enable the tourism stakeholders to measure the full economic impact of this industry is indeed justified.

Waiting to implement this recommendation in stages, rather than speed it up, risks weakening this important industry. Malta simply cannot afford it.