Going for growth

On Friday, it was my pleasure to be present together with the Prime Minister for the presentation of a professional report drawn up by Deloitte and Touche with regard to the restructuring required within the Malta Tourism Authority.

The report was finalised within the deadline set by Government and provides an extensive review of what is urgently required of the Authority to respond more effectively to present exigencies and opportunities.

Tourism is a dynamic sector and apart from being pro-active about future trends, it requires us to have precise benchmarks and goals by which to gauge the performance of the Authority in this field. In particular we must ensure that our market share is not only maintained but also improved within our carrying capacity limits.

The global tourism industry has recovered to pre-2002 growth trends and there is an international consensus that an annual growth rate of 4.5% is now expected over the next ten years. Malta needs to rise to this challenge.

Over the past months, I have been directing the Authority to take a critical and introspective look at its operations, to gauge if it is performing as well as it should, and in particular if it is focusing enough on its core activities, especially on an effective marketing strategy that ensures that Malta will make further economic growth from tourism.

The report compiled by Deloitte and Touche confirms the observations that Government has been making and provides us with indicators about how to proceed in the immediate future.

Tomorrow, the Malta Tourism Authority board will be delving in further detail the recommendations presented through this report. Following that examination, a process of consultation with all stakeholders will be very important and that process will bring within its fold the Opposition, the unions and all other interested parties.

The Prime Minister, Dr Lawrence Gonzi, was unequivocal about the commitment that Government is making to this sector: "Tourism is the key pillar of the Maltese economy, and my government is committed to take whatever action is necessary to ensure sustainable economic growth from this sector. We consider this sector as a top priority area that must move forward to realise its utmost potential. As in other areas of government, we will ensure that a dynamic change process is set in motion that responds to present-day exigencies and opportunities. Together with all stakeholders we can ensure growth from which the entire nation stands to benefit immensely".

Government is determined to go for growth. When we talk of the need to ensure an economic revival in the national interest, it is clear that performing well in tourism is one of the best ways to guarantee the kind of kick start that is needed, not only for tourism as an end in itself, but for the nation as a whole.

When tourism is well managed, there will be the right kind of economic return for every lira spent.

The strategic team to oversee the restructuring report that was set up at the end of July, was given two months to carry out a comprehensive review of the MTA's organisational structures, expenditure, human resources, procedures and work practices.

The team was furthermore entrusted to give its recommendations on how the MTA should be redimensioned to ensure that Government expenditure on tourism promotion results in more efficiency, effectiveness and accountability thereby producing more economic growth from the tourism sector.

The process undertaken by the strategic team included extensive interviews with over 100 key players in the tourism industry thereby ensuring the widespread inclusion of their opinions and recommendations on the way forward. Moreover the team tapped the experience and knowledge of three international experts who have been extensively involved in similar restructuring exercises in the international field.

I am grateful to Deloitte and Touche for delivering their report on time and for putting in far more hours, despite a capping on their remuneration than originally envisaged. The months ahead will be more crucial, since following the consultation process that will take place and the adoption of the report's final version, with or without such amendments as may be necessary, it is of the essence to proceed to its implementation and to do that as expeditiously as possible, managing the change process diligently in order to achieve positive results for all concerned.

The tourism sector has the potential to perform much better if we all focus and co-ordinate our efforts. The draft report presented to the Prime Minister is proposing some significant changes that require due consultations with all stakeholders. I am confident that the new proposed structure will lead to a much greater emphasis on the marketing dimension of the MTA and with a shift away from a traditional destination led strategy to a much more aggressive and focused industry based segment-driven strategy.

That is in line with what the industry has by and large been itself recommending to Government over the past months.

Following the presentation of the draft report, I immediately contacted the Shadow Minister, Evarist Bartolo, as well as Gejtu Vella, secretary-general of UHM (which has only recently signed a collective agreement with the MTA on behalf of the Authority's personnel), to inform them that after the board concludes its own deliberations about the proposals put forward, it would be appropriate for them to have an immediate copy of the proposals being made as well as to have a presentation about them.

The consultation process that now needs to be put in motion needs to be an effective and comprehensive one, since we are dealing with a sensitive and crucial sector that deserves our undivided attention in an objective and non-partisan manner. Malta is making a success story in its financial services precisely because of such an approach. It deserves no less in tourism.

I agree with MTA chairman Chris Grech who said: "Clearly the tourism sector is too important to our economy for us to be divisive about changes for the better. We all agree that tourism is fundamental to job and wealth creation and we need everyone on board to make this happen."

"The strategic team has left no stone unturned in order to ensure that the first two phases of this project, the review and the proposal of recommendations, have been carried out in detail and within the deadline set by Government. Phase three of the project is the implementation process which is ultimately what will make the difference to the future of the tourism industry in Malta".

Only one day before the presentation of the report to the Prime Minister, the National Statistics Office indicated that in August we have had an increase of six per cent in the number of tourists departing from Malta compared to the same month last year - from 167,112 departures last year to 177,097 this year.

The reason why tourists are now being counted on the basis of departures rather than arrivals is that the NSO is gauging tourism activity in Malta on a survey conducted before tourists depart from Malta so as to collect other valuable information about their stay here.

The same NSO news release indicates that tourism expenditure in August was over three per cent higher than last year.

Moreover, I am informed by the industry that the situation in September has also been encouraging. That will mean that we would have had four consecutive months of better performance than we had last year.

That gives us cause for cautious optimism. On the other hand, we are not yet out of the woods. If one considers cumulative figures for the first eight months this year as compared with the first eight months last year, the expenditure level is still down, although the number of departures seen on its own has increased.

I am convinced that Malta deserves a higher market share and as long as we all work together to ensure the success of this industry, we can achieve the recovery of this industry as well as go for growth.

That in turn requires that the MTA will have the appropriate structures in place as well as precise action plans for the future. The report presented last Friday is a step in the right direction, but only a beginning.

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