The news coming from the Gozo tourism sector is quite mixed. The Gozo market is dominated by self-catering units that seem to be doing well but the collective accommodation sector experienced double figure falls in the months of May and June following healthy increases in the previous months.
According to the National Statistics Office, the collective accommodation sector, comprising nine hotels, guesthouses, and tourist villages and representing 2,000 of the licensed beds in Gozo, experienced a 4.5 per cent decline in arrivals and a 10.5 per cent drop in bed nights.
Even if two months are not enough to determine whether there is a negative trend developing in this sector, the red lights are flashing frequently enough for policymakers to take notice.
Gozo Tourism Association CEO Joseph Muscat, said such decreases should be looked into and taken seriously. The question that needs to be asked is why tourists shunned staying in collective accommodation in May and June and whether this persisted in the remaining months of the year and beyond.
The self-catering sector is doing better. The shift from collective to self-catering accommodation is probably one influenced by cost. It is a well-known fact that Maltese tourists are very cost conscious. Some claim it is cheaper to spend a few days in Sicily than in Gozo. They, therefore, want to make sure they get maximum value for every euro they spend.
The Gozo Tourism Association still has a concern about properties that are not licensed. That the country’s shadow economy is so vibrant is possibly a result of the lack of political will to tackle the problem. On an economic level, unlicensed accommodation is increasing the bed supply and crowding out the licensed units. Like in every industry, Gozo tourism entrepreneurs need to update their business model. If the collective accommodation sector continues to decline, it will not augur well for the future of the industry. The collective accommodation sector has a bigger knock-on effect on the Gozo economy because it employs more people. Moreover, tourists who stay in collective accommodation tend to spend more money in Gozo while on holiday.
The issues facing the self-catering sector are perhaps simpler to resolve. As long as the authorities turn a blind eye to abuses by unlicensed accommodation owners, honest investors will continue to suffer unjustly. Enforcing the law is not such a difficult task unless one is less than convinced that this is the right thing to do to protect honest investors.
One can come up with a list of credible reasons why the collective accommodation sector, which is not all that large in number but important in added value, may be declining. Gozo has a special attraction to tourists who appreciate the enchanting beauty of the island and are prepared to spend money to enjoy this experience.
A soul-searching exercise is needed by all those involved in the collective accommodation sector to define the future of the industry. They need to classify the key success factors that will keep Gozo in the list of priorities of the niche market of affluent tourists who seek the special experience that the tiny island can offer.
Gozo’s collective accommodation operators must avoid adopting a silo mentality where they only clamour for more public investment to promote tourism but shy away from contributing to that investment.
A continuing marketing campaign, tailor-made to promote the island’s unique advantages, could be a first step in updating the Gozo tourism model.