A valuable boost to winter tourism

The most daunting challenge facing operators in the tourism industry is arguably that of attracting sufficient visitors in the winter months to make their operations financially viable. The industry operates at practically full capacity in the summer months when occupancy rates in hotels are high. The winter and shoulder months tell an entirely different story.

A booming tourism industry that is vibrant throughout the year is an objective that all operators should aim and work for to guarantee success.

One of the risks facing the tourism industry next year, as pointed out in a recent Moody’s report on tourism in Malta, is the possibility of a strong economic downturn in Europe from where most visitors come. With the prevailing uncertainty surrounding the fate of the euro, many would argue that a continuing economic slump in the eurozone is more of a probability than a possibility.

It is in this context that one should evaluate the decision taken by Malta International Airport not to charge landing fees to scheduled airlines during winter. This move will cost the airport operators an estimated €1.3 million. It may not appear to be much but it certainly shows the right attitude by a private company that enjoys monopolistic market conditions.

One beneficiary of this move should be Air Malta that is still going through a laborious negotiating process to have its restructuring plan approved by the European Commission. The delay in the finalisation of this process is giving rise to uncertainty not just for the airline employees but also for all those involved in the tourism industry.

It is, therefore, essential that the MIA decision is complemented by other breakthroughs, like the approval of the national airline’s restructuring plan, which are needed to improve the prospects for tourism for next year and beyond.

The MIA initiative should also encourage other airlines, especially the low-cost ones, to continue operating all the services that already exist and, possibly, open up new routes. Ryanair has often complained that landing fees in some countries, including Malta, are too high and they have used this argument to eliminate some routes that were less profitable. While one can understand that most airlines serving the Malta routes are mainly driven by the profit motive, the tourism industry needs to rely on regular services if it is going to attract as many visitors as it can accommodate throughout the whole year.

The decision by MIA should not exclude further negotiations with all airlines, especially with Air Malta, to ensure that the landing fees charged are equitable in the context of a market that offers monopolistic advantages to the management company of the country’s only airport. At a time when the airport has seen a record number of passenger movements over the past 10 months, it will be wise for MIA to consider passing some of the benefits of this increase in business to the airlines that are, in fact, making this success possible.

Self-regulation and tangible customer support by the MIA is certainly more effective and desirable than any intervention by the monopoly regulator if the airport operator is perceived to be taking unfair advantage of its dominant position in a monopolistic market.

The MIA has proved it wants to make a contribution. The move on winter landing fees is indeed a significant boost for off-peak tourism. It needs to be followed up by other initiatives that add value to the experience Malta offers to visitors.