The government has been asked to look into the possibility that shore excursions sold on board cruise liners would be exempt from VAT if the ship is registered outside the EU, according to industry sources.
The ship would also need to belong to a company whose head financial office is also registered outside the EU.
“At present, the excursions are subject to 18 per cent VAT, which makes them less competitive,” the sources said, noting that excursion sales are a very important source of revenue for cruise liners. This has become even more of a deal-breaker now that local excursion companies are being allowed to sell excursions from booths on the quay, which has raised the ire of many cruise companies.
The government is also evaluating the possibility of allowing cruise ships to have temporary permits to operate a casino while in Malta, again opening up more sources of revenue. Other destinations have seized this opportunity: Gibraltar recently allowed onboard casinos to open after 6pm.
MSC has drastically reduced the number of calls to Malta as the route was not profitable enough, with Aida also cutting calls and NCL dropping Malta completely.
The MSC and Aida reductions will mean approximately 177,000 fewer passengers this year – a considerable amount when one considers that the total for 2012 was 609,000.
Costa is also expected to reduce the number of calls to Malta next year in favour of Ibiza, meaning 45,500 passengers lost over the 13 summer weeks.
These developments have come at a bad time for Valletta Cruise Port, which operates the cruise terminal, as it is currently “paralysed” by tension among the board members, according to the sources. Joe Zammit Tabona is expected to return as chairman once he completes his term as Malta’s High Commissioner to the UK, which many operators feel will turn things back on course.
But in the meantime, agents are lobbying the government to do all it can to lure cruise companies back to the island in 2014 and 2015, well aware that there is no time to waste as decisions on itineraries are taken well in advance of the season.
Operators are also watching intently to see how things develop as Valletta Gateway Terminals is currently upgrading its 480-metre quay, which could one day offer strong competition to Valletta Cruise Port.