The year started well for our tourism industry. Tourist arrivals by air up to April were significantly higher than last year, as were the number of tourists arriving on cruise liners. Recovering equity markets, return to growth by some European economies, improved company profitability, and a general feeling that the worse of this bitter recession was now over helped to kindle a much needed sense of optimism that we had not seen for about three years.

But this feel good factor did not last for long. The sovereign debt crisis in Europe has forced EU politicians to start taking some serious action on reforming the unsustainable public finances of most southern European states.

The operators in our important tourism industry are anxiously awaiting the beginning of the peak season to see to what extent we will be affected by the seemingly unending international economic turbulence. There are, of course, some very positive developments that make one hopeful for a good year in the hospitality industry.

Ryanair, for instance, has chosen Malta as one of its bases thereby increasing significantly route and seat availability on its flights to and from Malta. Air Malta has also done its part by increasing the number of routes that will hopefully put Malta on the travel schedule of new potential visitors living in areas of Europe that were so far off the beaten track.

The much needed transport reforms, which should start showing results fairly soon, may also boost the quality of our tourism package by making it easier for cost- conscious tourists to move about in Malta with more ease and at a reasonable cost. Hopefully, the Icelandic volcano will continue to lie dormant after causing us more than enough heartache in the last two months.

The downside risks relate to the economic situation in Europe. The lack of confidence in European consumers as a result of fiscal tightening, economic stagnation and a general sense of helplessness could easily lead to a retrenchment in the holiday business. Quite apart from job losses still increasing in Britain, Spain, Italy, Ireland, and France those still with a job are going to be hit by heavier taxes imposed by governments to address the debt issue. Britain, for instance, is reportedly considering a holiday travel tax that will undoubtedly dent foreign travel flows to Europe.

In tough times like this it is to be expected that competition will increase. In our case, the main threat will come from Spain and Greece who will do all in their means to boost their tourism by reducing their costs and upgrading their product. The devaluation of the euro should not make a significant impact on tourist flows within the eurozone countries.

So, it is to be expected that the strategy used by these countries will be to cut costs to more sustainable levels to boost market share. The hard pressed European travellers will increasingly look at low cost destinations like Turkey, Tunisia and Croatia - destinations that may have been discarded up to some time ago because of a bad image.

I am sure that our tourism operators will not adopt a fatalistic attitude in the face of these serious challenges. Out hospitality industry is crucial to our economy because it creates jobs for many people who may lack some of the skills demanded by the more advanced of the 'new economy' industries, but who are so dependant financially on the success of this industry.

I am encouraged by initiatives taken by some public spirited individuals like Michael Refalo who has made a very valid case for the need of promoting the Malta brand more effectively. This initiative needs to be complemented by an obsession to put quality at the very top of our agenda to make the Maltese holiday experience an unforgettable one to all those who visit us.

Our tourism industry is vitally important for us all. We should avoid getting involved in partisan bickering in the public discussion that should be taking place on how to beat the tough competition coming from other Mediterranean countries.

While some of the factors mentioned earlier are beyond our control, there are many others that we can hone to give us that little advantage that we need to see our tourism prosper.

jcassarwhite@yahoo.com