A Tribute to Entrepreneurship

25^th June 2006

The Malta Independent on Sunday

A tribute is due to Winston Zahra Jr. for not mincing his words about the poor performance of the Minister for Tourism and the Head of MTA who keep acting as if all is well and in order when in fact our bread and butter industry is slipping from bad to worse.

Those who earn their spurs in the private sector know that there is space no between success or failure. You either deliver or you don’t. Those in charge of our tourism are not delivering even on their own set targets, quite apart from the fact that such targets are probably irrelevant.

Frankly I think tourism is too important for it to be left in the hands of politicians and their politically appointed acolytes. They seem to have no idea of what it takes to truly turn round this basic industry where we have natural advantages to compete. Even the signals being given by the market, clear as they may be, seem to be escaping them as they continue to play the tourist numbers game which is irrelevant at worst and tangemtial at best for the true cure of the tourism malady.

This is an industry where our best entrepreneurs have invested their huge millions to make it work. They have put their money where they mouth is and unlike Ministers and civil servants lack of success would burn holes in their pockets. They just cannot afford and to fail and consequently work their guts out to ensure that they remain at the refreshing end of the industry rather than at the discount end which the number game played by politicians for their short term ambitions anchor us in mediocrity.

The fact that five star hotels are showing growth when all the rest are struggling shows that only those that invest to keep their product fresh can win in a game which is being played by many other countries offering formidable competition.

The Zahras have invested in several outfits the latest being the Golden Sands. Tribute is also due to the Decesares who invested to give us Inter-Continental and the Pisanis of Corinthia who gave us their own brand which they are building at international level through selective investments in emerging economies.

But probably the biggest tribute is due to George Fenech and his family owner of Tumas Group and Charles Polidano of Caqnu fame. These are the people who seem to attract the most ire from those who are prepared to accept anything but success.

When George Fenech was seeking administrative approval for Portomaso project, including the Hilton Hotel and the Business Tower and the Convention Centre, he was made to look like the biggest villain in town. The offensive screams of protest in that MEPA public hearing still ring in my ears. For developing land he in any event owned till 2114 he was made to look like a speculator using public property for personal gain. Who remembers the hunger strikes organised outside Castille or the personal obstruction of pseudo environmentalists chaining themselves to earth-moving equipment on site? I am sure they had no idea what they were protesting about.

Today that Portomaso is a completed reality, providing a sample of what we could be if we can raise the whole island to comparable standards whilst preserving the historical treasures we are abundantly endowed with, no one seems to doubt the wisdom and the vision of those who inspired this investment.

Investing in five star hotel project is no piece of cake. It is not for those seeking the quick buck like the many who convert old buildings into concrete boxes for quick resale. The payback is long and arduous and depends on continuous investment and efficient organisation in all its dimensions, from marketing to operations.

Caqnu Polidano has invested beyond comparison to have a large contracting organisation capable of handling mega projects. He also poured money into his own investment projects including the newest St Julians Meriden and other diverse interest from cinema to wine-making. All this is not for the faint-hearted or for those who expect quick return for their money.

Whilst foreign investors were offered for free priceless land in order to construct hotel projects, which in many cases they failed to do and cashed in a quick profit by selling out to Maltese investors as in the case of the land over which the Zahra’s built the Julians Radisson, Polidano and Fenech were made to pay top prices to acquire public land for hotels they built in Gozo and Marfa.

Clearly entrepreneurs don’t invest for the love of their neighbour. They do it for profit, plain and simple. Unless they can see good profit at the end of the line they would not do it and if they do it they would not be around for long as in business the alternative to success is failure.

Being a nation of traders rather than producers, with a strong inbuilt trait for a quick buck and fast turnaround, such investors who can eye quality and invest for the long term are a rare species who deserve all our encouragement and appreciation. Branding Caqnu Polidano as baron is confusing true entrepreneurs who succeed in spite of the obstructions, with those who create bureaucracy to slow down our true entrepreneurs and force them to beg for what should be easily accessible.

If society ought to demand something from tourist entrepreneurs it is for them to search and appoint a CEO for our Toursim Authoirty who can truly engineer a turnaround over the medium term. No quick fixes, no numbers game, but plain and simple restructuring starting from product development, going to product packaging, to brand building, to effective marketing and finishing up with sales to clients who can perceive full value in our offerings and will pay a price that will permit us to make a profit to be reinvested to keep our tourist product fresh and bubbly.

It would have to be a CEO who cares nothing about his Minister’s demand to produce instant success and understands that brands can only be built on products packed with value and quality. Trying to build brands before achieving the necessary quality standard can only lead to the simple truism that effective marketing kills a bad product faster than bad advertising. Before we aim for the numbers we have to aim for all round leap of quality in our tourist products outside the walls of our top hotels.

The numbers then will take care of themselves and the brand will be built through effective marketing strategy but more importantly through the daily delivery of our promise which will lead to satisfied clients and word of mouth recommendations which will build the soft aura surrounding hard branding.