Adding value in tourism

We may be taking the benefits of our tourism in­dustry for granted, possibly because at the peak of the tourist season the island seems full to capacity. Most operators are happy with the impact this has on our economy. Hotels look full, restaurants are busy, souvenir shops are crowded, local teachers of English work long hours and busloads of tourists mill round the island enjoying the experience offered by our beaches and historical sites.

But a deeper analysis of the performance of this important industry may lead us to be more ambitious in the way we define success for this sector. While the number of tourists, bed nights and money spent are improving, a longer term perspective also show that added value generated by tourism since 2000 has often been either static or even declining. Similarly, the profitability for investors in this industry is gradually declining, so much so that this sector is often labelled by our economists as declining in importance – just like the manufacturing and wholesale and retail sectors.

Investors risk their money if they see good prospects of profit; otherwise they would just stack their money in a bank account. So, one question we need to ask is whether enough public and private investment is being attracted to the tourism industry to help it improve its competitiveness. The indications are that not enough investment is flowing in this traditional industry which is not increasing sufficiently in jobs or added value – the real acid test of economic success for most businesses.

This year we have seen some encouraging signals that things may be changing. The importance given to the quality of our sea water has produced results as Malta has been ranked third, after Cyprus and Croatia, for the cleanliness and safety of our sea water. We have also seen a major reform in our transport system that, once it settles down should add value to the services we give to our visitors, most of whom use public transport when on holiday. Hotels and restaurants are generally following more realistic pricing policies to ensure that they fill their capacity.

Unfortunately, there are also some negative elements that could easily be eliminated if the political will existed to create as little inconvenience as possible to visitors. I am referring in particular to the major road and construction works taking place throughout the island, especially in Valletta. These works all seemed to start at the beginning of the tourist season after a long period of hibernation by the decision makers who manage these projects.

Our tourism industry needs to be given more attention not simply because it is behind about 25 per cent of our GDP, but also because it is the main source of employment for most workers who, for one reason or another, are not employable in other more technologically advanced industries.

It is more than important to promote the knowledge based industries of the new economy, but the reality remains that we have large numbers of young and not so young workers who have not acquired the skills to fit in these industries.

An action plan is needed to accelerate the process of adding value to the service we give to those who pay to spend their holidays with us. Competition in the Mediterranean tourism market is intensifying with old players rethinking their strategies and new ones doing what it takes to put their names on the list of holiday options available to European holidaymakers.

The restructuring of Air Malta will probably mean a reduction in airline seat capacity as a number of routes are eliminated. Hopefully, this will be filled in by new routes offered by the low-cost airlines.

The real challenge, of course, will be the ability to attract more visitors in the winter and shoulder months when low-cost airlines may find it difficult to justify regular flights from certain destinations that at present are not popular with foreign visitors.

While we are no longer a low cost destination that can compete with the likes of Croatia and Turkey, we need to be constantly aware of the cost consciousness of today’s tourist. The economic situation in most EU countries remains uncertain. While Europeans will continue to travel to enjoy their holidays, they have become more selective where to spend their hard earned cash.

Our tourism industry can continue to contribute in creating economic wealth and jobs as long as we add value to our visitors’ experience.

jcassarwhite@yahoo.com