The summer season is over and our tourism industry drops down a gear. However, unlike some of our competitor destinations, we do not close shop in winter.
Malta has nurtured a business model that brings in enough turnover in the shoulder and the winter months to keep the industry going. Statistics show that business in off-peak months is growing and represents 67 per cent of our annual arrivals.
Business is also growing in the summer months, with a record June, July, August and September ,and with Malta International Airport hitting the 400,000-passenger-movement mark for the first time in its history in July and August. This is good news for those whose livelihood depends on tourism.
Since 2006, barring 2009, of course, tourism has been growing steadily. We had a record year in 2007. We had a record year in 2008. Barring any last-minute calamity, 2010 could be another record year as figures are now level with 2008.
Over the past four years, our tourist arrivals have grown from 1.1 million to nearly 1.3m.
Tourism expenditure is up by €132m over the same period last year and in excess of the same period in 2008 by €27m. Non-package tourist expenditure on accommodation has shot up from €68m in 2006 to €103m for the first eight months of this year. These results justify the policies, investment and actions undertaken by government.
We worked hard to make Malta more accessible. We invested more money in promoting Malta. Malta Tourism Authority’s budget alone increased from €14m in 1999 to €35m this year.
This year’s Budget, moreover, provides for an additional €500,000 allocated to market Gozo, €250,000 to bring sports-related tourism, €250,000 to enable government entities and NGOs to bring conferences, €2.5m for the Institute for Tourism Studies and €1.2m for tourism-related events.
In April 2006, Prime Minister Lawrence Gonzi launched incentives to strengthen air links to Malta and we managed to increase our direct scheduled links to airports from 54 in 2006 to 76 this year. We also managed to attract new airlines to operate to Malta.
Low-cost airlines, not present in our tourism formula in 2006, today represent 25 per cent of our business. Legacy carriers operating to Malta also saw their business increase.
Recognising the shift in international trends, we worked with our hotels to make them more accessible on the internet. Today, independent travellers represent 54.7 per cent, up from 30.5 per cent in 2006.
We also met tour operators and agreed on measures that helped them to maintain or grow their business in Malta. Some 22 new tour operators started sending clients to Malta and this trend is continuing.
To sustain all these new routes and business we are marketing Malta all year round in our important markets. Gone are the days where our campaigns were concentrated in two periods of the year and predominant only in the UK.
Our voice needs to be heard constantly and effectively, even if our funds can never equal those of our competitors who due to their size have much deeper pockets than we do. To achieve this we chose our media carefully. We are using traditional media but increasingly we are using the internet.
We are investing heavily in our product and the government has carried out major works in several areas. We are investing in our heritage through the fortifications’ restoration and the creation of a visitors’ centre and better facilities at the temples.
We will also be seeking to tap EU funds for the restoration of Fort St Angelo and Fort St Elmo, the two jewels in Malta’s patrimony. We are also investing heavily in our tourism infrastructure by upgrading the quays for cruise liners and arterial roads in key localities where cruise passengers disembark.
We recognise that even privately owned tourism serving facilities need upgrading and this is why the government has just launched a subsidy for refurbishments or extensions. Moreover, a fund of €10m offers private enterprise co-financing of up to 50 per cent for sustainable tourism projects.
The revenue to be generated by the two per cent increase in VAT on accommodation announced in the Budget represents only a fraction of the investment the government and the taxpayer is making in the sector.
The October 2010 proposal substitutes the 50 cent per night proposal made in October 2008 Budget that was intended to generate the €4m increase in allocation to MTA. Since then, the difference in allocation limited to MTA alone is €9m.
Sensitive to hoteliers who have signed contracts with tour operators before the Budget announcement, the government is actively considering a rebate on part of the incremental VAT for a transitional period of time. Hotels have until tomorrow to send a copy of such contracts for government to determine the implication and extent of such a rebate.
The tourism industry has changed and we are changing with it. This government is a catalyst for this change. However, change can only take place if the government and the industry stakeholders work firmly together. And no change can take place unless we are ready to invest in change.
Dr de Marco is Parliamentary Secretary for Tourism.