Getting Our Act Together in Tourism

Maltastar 

 

 

The dependence of our economy on the tourism sector cannot be overstated. Whenever tourism is not performing well, the economy suffers. Tourism is our main ‘exporting’ activity if measured by the important value added criterion. Its economic benefit is spread amongst all sectors of society from large entrepreneurs like hotel owners to small entrepreneurs like the self–employed artisan, right down to the workers at all levels of the industry.

Compare for example tourism to the activity of one of the major industrial units, ST Microelectronics. ST exports' gross value is probably more than tourism. But the value – added which is left within the economy bears no comparison. ST’s cost inputs have a high content of imported raw material that brings down the value added to a small percentage. Furthermore, the profits of ST are distributed to its foreign owners bringing down further the value added that actually stays within the economy.

“One cannot even argue that the government has wrong policies for tourism. The fact is the government has no policy for tourism”

 

 

Tourism is different. The import content in the tourist product is by comparison low giving it high value added margin. The price of the tourist product is in the accommodation and the service with little recurring import content. Furthermore the profits generally stay within the economy as the ownership of the main tourism infrastructure is generally owned by local investors. Air Malta, one of the key players, is owned by the state, and hotels, restaurants and retail related tourism outlets are mostly locally owned.

Given this crucial importance of the sector for the well-being of the economy it is quite incredible how the government seems to care pretty little about the well-being of the industry. I remember in the 1995 –1996 period when I was vice-president of the MHRA I got a first hand account of how the government had little priority for tourism. When we were making the strong point that taxation of the industry would just scare away the business and we strongly argued that the VAT rate on tourism should not exceed 5%, government just ignored our pleas and went on regardless to engineer a contraction of the industry.

It’s the same today. One cannot even argue that the government has wrong policies for tourism. The fact is the government has no policy for tourism, period. We seem to be going in different directions at the same time which essentially means we are going nowhere, just digging a hole in the ground beneath us as we run on the spot.

Perhaps, if I cite the deterioration in the product quality, the uncontrolled development going on next to tourist accommodation facilities, the dirt and decadence in most areas of the country I could be written off as a middle-aged moaner with a political axe to grind. So I would rather reproduce a letter written by a British tourist and featured in The Times of August 15th to do the job far more effectively than I ever could.

“As a tourist just returned from Malta, I am writing to protest at the apparently unregulated conditions prevailing at Comino’s Blue Lagoon.

“Our tourist message has to shift to something like this ‘what you can see in Malta in three days you cannot see anywhere else in the world. So near and yet so different.’ ”

When I went there on a boat trip last week the bay was choked with vessels and conditions ashore for those trying to swim and sunbathe resembled a penguin colony in the breeding season.

This lovely spot is currently a disgrace. If Malta is to retain its reputation for good swimming, measures should be taken to limit the number of tourist boats and to provide slightly more facilities for visitors.

How about providing a few more safe access points to the water and rubbish bins?”

 

 

After so many studies and consultancies, discussions and seminars we have not managed to absorb the simple truisms that come out from a hundred odd word letter written by a tourist client.

1. The product has to be right. Before spending millions on advertising and promotion we have to get the product right. The private sector has invested and is still investing in hotels, restaurants and facilities. But the government, attaching very low priority to tourism, has left the general public environment a disgrace even in the most beautiful spots like the Blue Lagoon.

2. We need to attach more priority to quality rather than quantity. We do not have the infrastructure to handle large number of mass market tourists so we have to be selective and go for the more value added tourist whilst keeping the numbers within the limits that do not prejudice the quality of our product. It is much much better to get a tourist who spends Lm100 a day for 3 days than a student who spends Lm20 a day for 2 weeks.

3. All operators need to be made more conscious of defending the tourist product and licensing should go hand in hand with strict quality control procedures including mystery shopping and spot checks. No use licensing more craft to dump tourist in a single spot if the facilities are not there to give true value for money to clients.

Labour government of 1996 –1998 gave a living example of how quickly can the market respond to injection of serious management giving co-ordinated direction to the industry. Bugibba was turned from a dump to a shiny tourist resort in the space of a few months and that for just about the same cost that this government has invested in the Sliema promenade in a project which seems to know no end.

I maintain that even on tourism alone our country can earn a decent living in a globalised world. And we can do this not by competing with the beaches and facilities which much larger countries can provide with abundance and lower cost.

We must discover the advantages given to us by our smallness and offer a product that is unmatched by competition. Our tourist message has to shift to something like this “what you can see in Malta in three days you cannot see anywhere else in the world. So near and yet so different.”

There is a market waiting for us to tap into with this message which will double the value added from tourism in the space of five years. If instead we continue to increase our cost base and discount the price as we continue selling to the mass market we will have to be witness to the slow demise of the industry upon which our economy so critically depends.

These are the solutions that a fatigued government cannot even be bothered to think about absorbed as it is in this August lethargy which is producing one of the worst tourist seasons of the last ten years.