The latest report published by the Malta Hotels and Restaurants Association sparked off serious reaction in the media, most of which highlighted the need for the tourism industry to be given immediate attention not only by the government and the Malta Tourism Authority but by all those who are in some way involved in this mainstay economic activity. The media coverage culminated in the news that the Prime Minister will be making concrete proposals to stakeholders. These proposals have not been made public yet and will be revealed to the MHRA on Monday.
It is important at this stage to take stock of the situation and look at the issue objectively, without emotions, but with a determination to get tourism off its hind legs.
The situation is that for the past 10 years we have been practically flat lining, with figures hitting the 1.2 million mark and basically stopping there. Apart from arrival numbers, the duration of stay has slipped downwards, meaning that even though arrivals have been flat, bed nights have gone down. To add to this, beds have been taken off the market but other beds have become available through new developments that have opened for business.
The main problem is that currently the supply of beds is much higher than the demand and this places the accommodation sector in a very difficult position when negotiating rates. This is the crucial problem that needs to be addressed aggressively.
Malta and Gozo need to have an influx of 1.5 million tourists on an average stay of 10 nights, meaning we need 15 million bed nights. As of now, we are very short of this target and one cannot expect that this figure be reached overnight. However, we need a strategy and a plan of how and from where are we going to achieve these magic figures. And over what period of time can we expect to achieve our aim.
The first and most important aspect is the carrying capacity. Since most of the arrivals to Malta come by air, the carrying capacity is a very important factor, in fact, I would say this is the most important factor, after the accommodation aspect.
Do we know how many seats are available on the market? Moreover, do we know what carrying capacity we need to be able to achieve our targets? There is, of course, the seasonality aspect which has to be kept in mind. For example, the airline seat availability in the lean winter months may not be there.
Although arrivals by sea are very limited, is there a way these can be improved?
Having established our targets we now have to formulate a plan to see how we are going to go about attracting people to our shores.
Primarily we need to know what we are selling. Malta and Gozo need to be branded, not necessarily branding Malta and Gozo in the same manner. I would brand Malta and Gozo very simply: sun, sea, culture and fun. To this we may add the friendliness of the Maltese and the Gozitans (which we need to regain).
Having established what we have to sell, we have to see to whom and how we are going to sell our product.
There is no doubt about it that tour operators from various countries are the most important way of increasing tourism. This source of tourism has to be tackled from a geographical aspect. There are core markets, which are mainly the UK, Germany, France and Italy. There are the other markets such as Belgium, the Netherlands, Sicily, Norway, Sweden and Hungary etc. Then there are markets we have not yet tapped or, if we have, we did so on a very small scale. These include Mediterranean countries, our neighbours, as well as far away places such as Japan, China and the US.
The strategy has to nurture tour operators in the core market to ensure a growth from them on a year on year basis. The same goes for operators in our secondary markets and, finally, we have to entice tour operators from virgin territory to start operating to Malta.
But we need to look after our suppliers. We need to have a point of reference in each destination. We need to have aggressive tourist offices where the main job is to keep in constant touch with the operators to ensure that their interest in Malta will remain and indeed improve. Personal contact is of utmost importance. Tour operators will lose interest in us if we do not show adequate interest in them. Tour operators also need our support through the right sort of advertising in order to ensure that Malta and Gozo are given the exposure for people to go into retail outlets and specifically ask for Malta.
When dealing with tour operators we have to establish target figures for every source country and the possible growth we are seeking. The percentage of the total influx of tourists we seek from tour operators has to be established, this again on a timeframe basis. We then need to establish niche markets, or segments as they are now called. In most niche markets there is already quite a lot of activity and results but we need to improve on these by setting targets and then going out to achieve them. Last year, for example, we set a target of 50,000 new arrivals. This is all well and good but did anyone think of drawing up a plan of how and from where are we going to get this increase?
The first niche market is without doubt the conference and incentive business. We have the infrastructure in place and we can take this business. We are very professional and, judging by experience, I find that the vast majority of conference and incentive groups are greatly successful. Yet, this market is only producing in the region of 60,000 to 65,000 delegates a year. With proper planning and more exposure, surely we can improve this drastically.
Again, what is being done to induce delegates to come back to Malta for their holidays? This is a market which has great potential for growth and is a lucrative market.
Other niche markets would include religious tours, diving, cultural tours, sporting holidays, walking holidays etc. The list could be as long as we want it to be. Again, a plan needs to be drawn up for every niche market we would go for, complete with target figures.
The timeshare market needs to be exploited more than it is at the moment. This is a market which produces "permanent" tourists as people who own timeshare will either visit themselves every year or else they are replaced by "exchange" owners. Each timeshare week sold will produce an average of three people. To-date there are about 100,000 visitors who come to Malta through timeshare and this is increasing annually.
There are three other niche markets which we need to tackle in a much more aggressive manner. These are the film industry, yachting and cruise liner passengers.
Filming has achieved a certain success rate, but are we doing enough to attract this type of business? Are we making it easy enough for people who wish to film in Malta? Are we marketing this niche market enough? These are all questions that need to be addressed, again by a set plan with definite targets.
Once again, a very lucrative niche is the yachting industry. Malta is strategically placed in the centre of the Mediterranean, an ideal place for yachting. But here we need to improve our facilities. We have Sliema Creek, an ideal harbour which we could turn into the greatest yachting centre in the Mediterranean, attracting mega yachts to use Malta as a base. Moreover, this will have an effect on the dockyard, making the 'yard more viable.
A lot has been done to improve the cruise liner activity and results have been achieved. But again we need to improve on these. We need to induce operators to use Malta as their base. This will not only increase the arrivals but a fly-and-stay programme will raise the number of arrivals opting for hotel accommodation. There is a lot of potential growth in this market segment.
What I have tried to do is highlight the need to know where we want to go and to plan in great detail the road to achieve targets while continuously monitoring progress to ensure we are moving ahead. I believe Malta has a great future in tourism in spite of the competition around us. Let's all work together to achieve this.
Mr Zahra is group managing director of Island Hotels Group.