Winter would be tough for the tourism industry, with airline seat capacity down by almost 11 per cent on last year, George Micallef, outgoing president of the Malta Hotels and Restaurants Association, warned yesterday.
This year will end on a positive note, with better results in tourism than last year. However, the economic downturn in Europe is expected to impact negatively the number of visitors for next year and the industry’s fears are compounded by uncertainties linked to the fate of Air Malta, which is on the cusp of a do-or-die restructuring process.
“The winter ahead of us appears tough with large tour operators and online travel agents reporting late booking trends and a market that is extremely price sensitive,” Mr Micallef said.
He pointed out that an MHRA study investigating the effects of drops in seat capacity showed that for every 1,000 seats gone arrivals go down by 630 in winter months and 770 in summer.
“The Malta Tourism Authority will require additional funds to make up for the shortfall in seat capacity and to increase arrivals for next year… As we have been saying all along, we must ensure Air Malta retains its role in the economy and a minimum of 50 per cent+ share of the tourism market. However, the restructuring process needs to be concluded soonest as it has been left pending for far too long,” he said.
Mr Micallef was speaking during the association’s annual general meeting, which saw the rebranding of MHRA and the appointment of Tony Zahra as the new president and Andrew Agius Muscat as the new CEO.
In his first address as CEO, Mr Agius Muscat said tourism was a “fiercely competitive market” and the association had always challenged continuity and adapted new trends.
Mr Micallef spoke of another trend, the declining average stay, pointing out that revenues depended on the number of nights spent not the amount of tourist arrivals.
Spurred by Labour Party criticism that other Mediterranean destinations were doing better than Malta, Tourism Parliamentary Secretary Mario de Marco pointed out that, unlike its competitors, Malta’s seven per cent growth this year came on top of last year’s growth of 13 per cent.
Earlier, Labour’s spokesman Gavin Gulia argued that Malta did not compare well to places like Greece, which this year saw their tourist numbers grow by 14 per cent.
Dr de Marco said Malta had reached growth earlier than competing destinations in the Mediterranean. “We were one year ahead of our rivals. If this year Cyprus had a phenomenal growth of 10 per cent, this was over last year’s growth of 1.3 per cent. Malta surpassed the performance of Spain, Cyprus and Slovenia,” he said.
“No month is like the other, no year is like the previous. Business models change, tastes adapt and trends fluctuate. Every year is a new year with new challenges and new solutions,” he said.
Dr de Marco said nearly two million people, including cruise passengers, would have made it to our shores by the end of this year. A ratio of five tourists per resident was probably the highest in the world, he pointed out.
He noted that the Budget allocated to the MTA had increased from €21 million in 2007 to €36 million for 2012. Mr Micallef, however, said that the additional funding allocated to MTA was not enough.
He argued that hotels would have spent about €10.5 million in marketing costs by the end of this year, in addition to about €1 million paid in contributions to MTA, but hotels could also be forced to spend more money in marketing to make up for the likely shortfall next year.
“The MTA may need to do the same and this is why we said that the additional funding allocated to the MTA for next year may not be sufficient,” he said.