Added value to revitalise tourism industry

As the tourism season enters its peak period, operators face significant challenges that need to be addressed in a pragmatic way if the industry is to prosper.

The bleak economic prospects in our traditional markets in Europe, the increased operating costs mainly in the form of high water and electricity tariffs, pressure by travel agents to knock down prices further and unavoidable capital costs to upgrade facilities are some of the challenges faced by tourism operators.

According to the president of the Malta Hotels and Restaurants Association, Tony Zahra, the number of tourists visiting Malta this year could roughly be similar to that of 2011. But, since hoteliers claim that over the last five years their profitability dropped by €10 million, more needs to be done to stem this deterioration in performance. One risk that the industry faces is the possibility of some operators caving in to foreign tour operators’ demands to cut room rates further. Such a move could increase revenue in the short term but jeopardise the future health of the industry. The MHRA’s appeal to hotel operators not to succumb to such pressure is, therefore, sensible. However, there is no denying that the Mediterranean holiday market is becoming more competitive.

The economic problems being faced by Greece has seen bookings to this tourist destination slump significantly this year. But it is to be expected that the Greeks will once again be formidable challengers for market share once they start concentrating again on strengthening their tourism industry.

Similarly, Tunisia may still be finding its feet after the Jasmine revolution but they will most certainly want to recapture and even increase their share in the lower end of the tourism market.

Hotel operators in Malta are very experienced in controlling operating costs but they are right in complaining about being burdened with the cost of the inefficiencies of public service providers like Enemalta. Until the question of high energy costs that are not linked to the increase in the price of fuel is addressed, every energy dependant industry in this country will suffer from a fall in competitiveness.

But the most important element that will guarantee the tourism industry long-term success is the regular updating of our tourism strategy. The Minister for Tourism, Mario de Marco, speaking at the launch of the Tourism Policy for the Maltese Islands 2012 – 2016, rightly pointed out that “it is not about tourism at all costs but an industry that is based on the authenticity of the product”. Put in another way, quality should be the hallmark of the holiday experience we offer to our visitors.

As pointed out in the policy document, operators need to upgrade and diversify the tourism product to make it more appealing to today’s typical tourists who tend to be younger and “organise their own trips using low-cost airlines and are out to explore rural environments”. The country must invest more in its cultural heritage and promote the beauty of the natural environment.

So the secret of success could well be found in a business strategy that aims to add value to the experience of tourists who choose Malta as their holiday destination. Value adding tactics could include higher standards of accommodation and catering in hotels as well as better trained staff but also constant innovation of the product on offer.

No strategy can beat adding value to the tourism product for the future prosperity of an industry that needs to constantly reinvent itself.