The saying that topline is vanity and the bottom line is sanity needs no justification to be accepted as sound business strategy. Judging an industry’s success by focusing too intensely on turnover is, at best, fallacious and, at worst, dangerously delusional.
The tourism industry is no exception. As long as policymakers keep quoting increasing visitor numbers as an indication of success, they prevent the industry from taking the necessary action to update its strategies to ensure the long-term sustainability of this critical motor of the economy.
Tourism Minister Clayton Bartolo told parliament that Malta attracted 2.3 million tourists in September and exceeded the record reached in 2019.
He said the authorities wanted to continue attracting better-spending tourists and improving service based on “quality, authenticity, and sustainability principles”. The shadow minister for tourism, Mario de Marco, has contrasting views.
He argues that the industry needs to focus more on quality rather than numbers, adding that the rapid population growth has led to congested roads, a lack of cleanliness, and a deterioration of services. These failures are certainly not indicators of improving quality standards.
The electricity outages and the rubbish crisis that gripped Malta last summer are just examples of policymakers’ lack of success in embedding high service standards in the tourism industry.
The Malta Tourism Authority, rather than acting as an effective regulator, invests in expensive marketing campaigns that, at best, show little, if any, evidence of value for taxpayers’ money.
Bartolo also insisted that a commitment to principles of authenticity underpins the industry. Today’s industry depends on foreigners for front-line contact with visitors in practically every service operation, from accommodation to catering to transport and entertainment.
Like other economic operators, today those catering to tourists’ needs focus on low-cost labour that can be hired and fired quickly. The result is that most front-line service providers are not qualified to sell an authentic Malta experience to visitors. The introduction of the skills pass is hardly likely to change this state of mediocrity in tourism services.
The third principle Bartolo claims is the rock base of tourism policymakers’ strategy, is sustainability. Comparing 2019 tourism expenditure with that of today is misleading.
The high inflation rates of the last three years have meant that Maltese taxpayers have been subsidising the accommodation, catering, and transport costs of tourists substantially.
The current fuel and energy subsidies do not discriminate between those who need taxpayers’ support to get by and those who can independently cope with inflation. Bartolo’s claim on the industry’s sustainability must be corroborated by information on how much taxpayers’ money in subsidies is used to attract visitors to the islands.
The tourism industry suffers from a disorder affecting other economic activities that need restructuring – policy reform inertia.
The government is not prepared to risk voter disgruntlement by introducing measures to steer the economy more sustainably. This is not what transformational leadership is about.
The tourism industry must shake off the complacency afflicting it for several years. The effects of populist measures are short-lived. Reality has a way of cruelly dismantling policymakers’ illusion that the status quo can be perpetuated by policy reform inertia.
This mindset change must go beyond high-sounding commitments to quality, authenticity, and sustainability.
It must spell out the hard work that needs to be done to transform aspirations into reality.