Paul Bugeja is an accountant by profession and believes in having checks and balances. He also worked in the hotel industry and is inculcating both these experiences within the Malta Tourism Authority culture.

The topic on everybody’s mind is the talks between Air Malta and Alitalia. It does not look as though an agreement will materialise…

I have to disappoint you as the MTA is not very much involved in this. Obviously Air Malta is an important asset and a key stakeholder for us. We would be sad to see it in any way losing its potential. We will do all we can to help the airline survive and grow.

The leaks so far about the route strategy and how it was aligned with MTA’s do not look very positive. Doesn’t that worry you?

Yes, obviously. Some of the routes are being operated for the benefit of Malta, and may not be profitable – we do not know for sure – but being an island, I am sure that some of the routes will have to be operated no matter who is managing the route network. As I did when I was at the MHRA, I still believe that Air Malta needs a partner, mostly in terms of strategic marketing, not necessarily funds. It needs to extend the routes outside the limited area within which it operates. To do that, you either have to have a big enough investment or you have to find a partner where there is a win/win situation, with some assets and some opportunities, and a partner – who could be smaller – but who operates in a different market. Then there would be synergy.

I am sure that Air Malta is looking at this and for us it is important that this issue is sorted out. No one is happy with the status quo or with the uncertainty.

We have said for so many years that we could not dream of surviving without Air Malta but it no longer has 52 per cent of the market. But Ryanair earlier this year actually took dominance of the market, and there are dozens of other airlines operating to here. Do we still need Air Malta so critically?

Ryanair has as many flights – they are still on a level playing field.

But not passengers and routes…

The question is whether we can survive without Air Malta.  Business ventures crop up and if Air Malta unfortunately has to go some day, I am sure that the business opportunities would present themselves to different airlines – and Malta always manages to find a solution.

Why are you moving to Smart City?

The decision was taken some time ago to convert this palace to the Museum of Fine Arts. When I came here in August 2014, there were various options but no realistic ones. One of the sites I had my eye on was the former Air Malta headquarters but this was already taken. For a lease, you do not actually need to have a public tender – but I did so anyway and got three quotes, which a committee then ranked, and Smart City and one other location were suitable, but would have cost over €600,000 a year!

Fortunately, soon after, it was announced that the Institute of Tourism Studies would move to Smart City. We reduced the footprint we originally wanted – 2,400 square metres – and renegotiated a much better price for one floor. We will consolidate and move our stores and Msida offices there too.

The rent will increase slightly every year but I have the option to leave after four years.

The important thing is that we are slowly but surely fighting seasonality

The government Budget for 2017 had little new for tourism. Did you have a wish list?

The Tourism Foundation – which the MTA forms part of – was set up to collect the bed tax and over the past few months since it was put into force, it will have accumulated some €4 million by year end, which will be used on projects. As the MTA, we are working on more accessibility to beaches, including passages across the sand, accessibility for persons with mobility problems, and we also want more Blue Flag beaches.

China and India have also been mentioned and we are planning more targeted marketing there. We are not looking at getting millions of tourists from there – or even hundreds of thousands. In fact, the government is talking about 10,000 in 2018 and 50,000 by 2020. This is quite possible, even without direct flights, given the size of the market.

We also have an LGBTI project as this is another market that we can tap, one of people who tend to travel more than the average with higher liquidity. There are the so-called ‘rainbow’ statistics on the rights of LGBTI people in 49 different European countries – and Malta ranks first, with nearly 88 per cent, with Belgium in second place and the UK in third.

The important thing is that we are slowly but surely fighting seasonality. In 2013, January arrivals were only 29 per cent those in August; now it is 33 per cent. And if you take a period like November to April, in 2013, this was 46 per cent of the summer six-month total, and is now 49.

And yet January arrivals this year reached 85,000, compared to 250,000 in August, so there is still a lot of spare capacity before we say Malta is full up!

Photo: Mario GaleaPhoto: Mario Galea

The MHRA expressed concern about too many new hotel beds being added to the stock. Does the MTA agree?

Next year, we are going to have a problem: not enough beds in summer. Demand is high and hotels are increasing their rates substantially. Operators for the UK market are not finding enough rooms and some are actually paying a deposit to secure rooms in advance.

I was at the World Travel Market last week for three whole days and this was the issue raised repeatedly.

So Brexit is not going to hurt us because of the weaker sterling rate?

It appears that a number of operators took hedges on sterling so it is definitely not an issue for next summer. After that, we will have to wait and see as the rate of exchange could recover. At the moment, it is not a concern.

If hotel rates are going up, the expectations are raised for the environment outside the hotel too. There is now a master plan for Paceville, where many five-star hotels are located. How do you see it?

The idea of getting a holistic plan with the input of all the stakeholders is very good. However, deciding on what there should be in the future is not as important to us as what will happen for the four years that the projects will take. This will be much more of a headache for the tourism industry than how high or low a particular tower would be. We need much more careful study on its impact. Look at the inconvenience when we were just working on one ROAD prior to CHOGM… Unless there is coordination between us, Transport Malta, the operators and the service providers, it will be very difficult and challenging: we need to avoid complaints about the construction phase.

The MHRA keeps complaining about the fact that hotels are losing bookings to entities like AirBnB and other direct booking networks which are not regulated. What is the MTA doing about this? Should it even be doing anything about it?

AirBnB were here in Malta and met with us. We are not in conflict with them; neither are we their partners – although I do not rule out any joint marketing activities with them in the future, just as we do with Expedia.

It has created a lot of activity for Malta, and is a trend that we cannot ignore: why shouldn’t a visitor find a bed for a few euros if there is someone willing to offer it?

However, I challenge the assumption that all AirBnB hosts are unlicensed. We have 2,600 licensed units on our register. Obviously there are some who are not…

AirBnB is not ready to vet all those who post their properties, not even as a mark of quality – which is, after all, what we are after, not fees! But their concept is based on peer review so they do not need it. The host is not even paid until 48 hours until after the guest arrives, to make sure that all was what it should be.

However, they are willing to work with us on collecting the bed tax. The only disadvantage is that they would pay an aggregate amount, so you cannot identify the owner. But this system is used in other countries so we need to see how it can be done here.

The issue for us is control and the MTA has increased its enforcement officers from eight to 18 and are also working on nights and weekends, which was a big step forward. The number of inspections is now increasing dramatically, while the number of complaints is fairly stable and very low – around 135.

There are also many more categories for bars and restaurants, for those who cook on the premises and those that only serve, and so on...

We also split the licensing and enforcement directorates, to avoid any possible conflict of interest. And for the first time, we are also checking on the properties that are already licensed, which never happened before. We check hotels every year but until now not holiday furnished premises.

We are also working on a campaign to highlight the benefits of registering your property, and it is working. One of the benefits is getting insurance: few people consider what could happen if something went wrong. We had 508 new applications in Malta so far this year, and 80 new ones in Gozo, almost three times as much as the average for previous years.

I do not see us as police trying to find infringements but rather as an authority seeking to improve quality.

Tourism Minister Edward Zammit Lewis had promised some months ago that there would be new regulations for restaurants. The Times of Malta has repeatedly highlighted problems with the definition of catering outlets that only take bookings – not walk-ins. Is anything happening?

It is one of the loopholes that will be closed… The MTA had discussed it with all the stakeholders and the draft is ready to be presented to Parliament.

It includes significant changes. There are 17 legal notices in the subsidiary legislation which will be reduced to eight, and accommodation categories will be increased to have more options for those who want to licence, with appropriate standards for each. These will cater for the AirBnB hosts, for example.

There are also many more categories for bars and restaurants, for those who cook on the premises and those that only serve, and so on, all changes that were sorely needed. Even clubs, which previously fell under police control, will have to have a licence if they serve food. And there will be a licence to operate as a late-night entertainment establishment, which was another lacuna.

Does that mean more enforcement?

More work, more enforcement, more everything.

Will it solve the issue of bottle shops?

They are not part of this law. They still fall under the trading regime.

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