Senior government sources have expressed concern over internal conflict within Valletta Cruise Port which they feel may be hampering the response to challenges in the cruise industry.
MSC Cruises, which in 2010 had committed to including Malta in its itinerary for five years, pulled out recently, citing rising fuel costs as the reason. The cruise line used to bring as many as 160,000 passengers a year to Malta, almost one of every four visiting the island.
AIDA Cruises also decided to stop its weekly port call.
“While there was little that could be done to persuade these cruise lines to stay, if there were a strong strategic focus at board level, more could have been done to substitute the lost business. They need to work as a team,” the sources said.
The internal disputes seem to have arisen from the differing and perhaps conflicting interests of some of the shareholders, industry sources said.
In May 2009, Anton Micallef was appointed chairman to represent the international shareholders but he stepped down last autumn and was replaced by Herman Miceli Demajo in an acting capacity. However, Mr Micallef remains a director on the board.
The intention is for the chairman’s post to be given to Joe Zammit Tabona once he completes his term as Malta’s High Commissioner in London in a few weeks’ time. He had already held this position between 2007 and 2009.
One operator, who also asked not to be named, explained that cruise liners do not have to charge VAT on onboard sales as long as the vessel stops in a non-EU port on its itinerary, which drove many lines to include a stop in Tunisia once Malta joined the EU. There is not much that can be done about either this or rising fuel costs.
However, there are other operational factors that are within the control of Valletta Cruise Port, such as the decision to sell excursions from booths on the quay. This has not gone down well with cruise lines, as sales of excursions from on board generate some 30 per cent of their revenue.
The industry sources said that although the cruise lines had already lost half their business to internet sales, this competition from booths was very unexpected – and highly unpopular.
The Government has a vested interest in making sure that the cruise industry flourishes: Valletta Cruise Port passes on 10 per cent of its revenue from cruise operations as well as 15 per cent of the revenue from leasing of the outlets at Valletta Waterfront.
However, the Government does not, at least at present, contribute towards any infrastructural works, either directly or through co-financing with the EU, as happens with other port sites in Malta. The Government is planning some measures to help the industry, for example, by issuing temporary gaming licences so cruise ships can open their casinos while at berth in Malta.
In 2012, Malta welcomed 609,000 passengers on 322 vessels, compared with 557,000 passengers in 2011 and 491,000 in 2010.
Another significant factor is that the number of passengers staying overnight has also been increasing, with 13,000 in 2012, compared with 11,000 in 2011 and 9,000 in 2010.
However, the picture for the first quarter is a bit gloomier, with a decrease of 3.3 per cent in passenger figures.