Mario de Marco is upbeat about the prospects for tourism and points out that the figures this year related to arrivals, bed nights and expenditure are indeed positive.
“In the first eight months of this year, tourism expenditure is up by 20.5 per cent, which translates into an increased expenditure of €132 million compared to the same period last year. This is even higher than what was spent in the same period in 2008, a record year, when the figure was €750 million. This year €777 million was spent,” the Parliamentary Secretary for Tourism says.
He points out that tourist expenditure on accommodation has also increased. In January to August 2006 non-package expenditure on accommodation was €47 million, increasing to €70 million in 2007 and reaching a peak in 2008 of €106 million. It was reduced to €86 million in 2009, and increased this year to €103 million.
“One may argue that the 2010 figure is still less than 2008. However, in 2008, there were many tourists who were booked on a half board basis, today the trend is moving to bed and breakfast, so the spend on accommodation is still effectively up,” he says.
The trend in other expenditure is also relevant, such as in restaurants, excursions, museums, and anything not related to accommodation and airfares. This is also increasing, even over 2008. In the period January to August this year, the estimated expenditure was of €294 million, compared to €232 million in 2009 and €258 million in 2008.
Despite higher revenue and arrivals, however, the MHRA has complained that over the past five years the industry has witnessed a gradual decrease in profits, and has blamed this principally on government induced costs. What did Dr de Marco feel about this?
“Government induced costs, which are principally the utility tariffs, affects all industry, not just the tourism industry. If the operators didn’t have increased utility bills, they will still be paying for them through subsidies, which come from taxpayers’ money.”
Dr de Marco says the government has introduced various measures to help the tourism industry, such as the loan subsidy scheme which subsidies interest rates of up to three per cent on hotel loans, which was in fact launched yesterday.
“Last year we set up a fund worth €10 million for sustainable tourism projects where we co-financed up to 50 per cent of any linked to sustainable tourism. It was very successful, and was in fact oversubscribed,” he points out.
Asked why the energy saving scheme for the tourist industry, which was agreed to in March, has not yet come into effect, he replies that this is being handled by Malta Enterprise and should be launched soon.
He adds: “Malta Enterprise had already launched a similar scheme which was taken up primarily by hotels.”
He says the government always tries to accommodate tourism operators and mentions the postponement of the €0.50 bed tax as an example.
“In the budget presentation of October 2008, the government had announced that besides increasing its allocation for the Malta Tourism Authority, it was seeking to raise revenue by introducing a €0.50 bed tax. Its introduction was postponed to January 2010, in order to give a breathing space to the industry.
“The industry then asked us to postpone the tax to April 2010 when we were asked to change the nature of this contribution. The MHRA’s proposal to change the bed tax to one which would be paid by departing tourists purchasing a voucher encountered legal problems at an EU level. We are now trying to come up with a scheme which is acceptable to the industry.”
He emphasises that the record €31 million allocated to the MTA this year yielded positive results and today Malta is connected to 76 air routes.
Will MTA have the same budget next year as this year, or perhaps even more?
“That’s up to the Minister of Finance,” he says diplomatically, adding that he has put in his request like every other member of the government.
“The Finance Minster has the difficult job of trying to accommodate everyone’s request without increasing the country’s deficit.”
Dr de Marco says the government will continue to work towards increasing seat capacity and it is important to work well with all airlines and tourism operators.
“We cannot overlook the fact that Air Malta brings to Malta 65 per cent of our tourists. Also, 45 per cent of our tourists are brought here by tour operators, so they remain a critical partner. However, we know that the international trend is changing, and tourists are increasingly booking their own flights and accommodation. So we need the right mix, of low cost, of legacy and charter operations.
“Cyprus, for example, was badly affected this year because it was too dependent on the tour operators. Other destinations, such as the Canary Islands, were too dependent on low cost airlines and suffered last year because they had an issue with them.”
Dr de Marco says the government has carried out a number of major embellishment projects in support of the tourism industry in various localities such as in Valletta, Sliema, Marsaxlokk, Bugibba, Qawra, St Paul’s Bay, Wied iz-Zurrieq and the Hagar Qim temples.
“We have also invested substantial amounts of money on the management of our beaches and extended such services to Golden Bay, Ramla il Hamra, Ghadira and Fond Ghadir.”
He says hotels also need to invest in their product and keep abreast of the changing nature of tourism.
“I understand that last year was a difficult one due to the global economic climate, and while I acknowledge that the quality of the service we offer in our five star hotels and a number of four star hotels is good, more work needs to be done in the three star hotels, and some of the four star hotels.
“The industry must acknowledge that types of tourists coming to Malta are changing and are no longer predominately from the UK. The Italian market represents our second largest source market and this year we estimate that almost 200,000 Italians will visit Malta, an increase of some 35 per cent.
“Arrivals from Spain are also significantly up, by 65 per cent so far. There have been increases in the number of Scandinavian tourists as well. Tourists’ habits are different, depending on their nationality, and this has to be taken into account by the industry. We need to make a qualitative leap in what we offer. Most tourists are no longer tour operator tourists, but independent minded tourists,” he says.
The tourism market should be looked at “in the long term”, adding that the mistake everyone makes within this industry is simply to look at figures in the short term.
“The government and the private sector need to have a discussion on the long term vision for this industry. How many tourists can this island take? What type of tourism do we want to promote? When we say we want sustainable tourism, this has to be believed by not only the government but also the private sector.
“My appeal to the tourism industry is this: the projects they come up with should respect the environment, not scar the environment. Secondly, they must be projects which conserve and bring out the authenticity of these islands. When we build or refurbish hotels, the Mediterranean feeling has to emerge. When we create excursions the islands’ authenticity must come out. My concern is that many of the excursions offered today to tourists are the same excursions offered 40 years ago,” he says.
Dr de Marco believes there is a lot of tourism potential in many of Malta’s villages which is unexploited.
“I am very much in favour of boutique hotels, which offer a personalised service in authentic surroundings. These can be located in the villages in regenerated houses. My appeal is not to knock down buildings but to make use of existing ones.”
He says places like Siggiewi, Fawwara, the old core of Qormi and Zejtun are, unfortunately, not yet getting enough tourists.
He adds: “We need to do more to bring more tourists to the Cottonera area. A lot has been done there and the area has changed radically over the last 10 years, and it can change even more. The success of the recent Birgufest shows the potential of that area.”
“Localities such as Lija, Attard and Balzan can offer much for small, quality type tourism. Let us be very careful not to destroy the very nature of these villages, which makes them attractive in the first place. My appeal is to preserve the authenticity and not create something which tourists can see in other countries.”
He believes Malta, with its vibrant culture, can be a destination for all seasons.
“We don’t only have 7,000 years of history but also a lot of talent in the visual arts and performing arts. We are working closely with local councils and had about 57 different events in a year,” he says.
He points out that in the last two years Mepa has distributed close to €7 million to local councils for the embellishment of villages.
“Now, he says, “the time has come to use these funds, the urban development funds, at a different level, to regenerate the urban conservation areas of our villages.”
Asked what can be done to make Paceville cleaner, a bone of contention with people in the tourism industry, Dr de Marco says the problem is that there is a garbage collection system for residents in Paceville but not for the commercial sector. In other words owners of bars and restaurants take out the garbage whenever they like, usually when they close. However, discussions are being held to establish a collection time for garbage from the commercial sector in Paceville and Bugibba.