Planning the country’s tourism strategy for the next five years is indeed a tough challenge in the context of a global economic slowdown that has not spared the EU countries from where most of our visitors come.
In the recent celebrations of the 20th anniversary of the setting up of Malta International Airport, the CEO, Markus Klaushofer, made sobering business forecasts for 2012. He is expecting reductions in the number of passengers using Malta airport because the island was “at the mercy of future economic developments”.
Cyclical fluctuations in the tourism industry are not unusual. The leaders of the industry need to update their business strategy constantly to ensure that the product remains fresh and competitive in a market that is constantly changing because of new competitors, evolving social habits, improving technology and unstable economic conditions. It is in this context that the draft tourism policy for 2012–2016 should be judged for its effectiveness.
The first impression one gets when reading the document is that it aims to promote tourism growth in diversified niche areas. Tourism Minister Mario de Marco listed a number of examples where he sees potential growth while not underestimating the challenges that such areas will present to operators in the sectors.
One such growth area could result from the encouragement for owners of old grand palazzi in Valletta to consider converting them into boutique guesthouses that appeal to cultural tourists who appreciate the beauty of the capital city. Dr de Marco was right in insisting that, whatever upgrading developments in this and other areas are undertaken, this should not be done at the expense of preserving the environment. This idea needs to be followed up with the introduction of a scheme to help the financing of such upgrades, especially as it is becoming evident that banks seem to be shying away from lending money relating to property development projects.
Another interesting proposal in the draft policy document is the strategy to diversify the successful but tired language teaching services to focus more on niche products rather than mass student tourism. The English language student market is becoming increasingly competitive and margins are slipping. It is also a very seasonal market that fails to support the annual running costs of most operators in this sector.
Aiming to attract “more mature students and corporate clients” should certainly help to improve the profitability of operators in this sector while easing the financial stress caused by seasonality.
The acknowledgement that Malta’s and Gozo’s competitive advantage lies mainly in the rich historical heritage should be the cornerstone of a tourism strategy for the next five years and beyond. The embellishment of Valletta and the older cities will continue to be a top priority for the improvement of the tourism infrastructure. Opening up more of the country’s historical buildings for longer hours will help to give tourists a unique experience of the cultural wealth that the locals seem to take for granted but that amaze visitors.
What definitely should never be missing in any strategic plan is the business dimension. Most operators in the tourism sector aim to earn a living form their activities. They risk their money and employ staff in the hope of making a decent economic return. They rightly expect the government to invest in the industry’s infrastructure.
The country, therefore, also needs to gauge regularly the success of the industry by monitoring the return that operators in this sector are getting on their investment.