There is no doubt that the catering industry plays a key role in Malta’s and Gozo’s economy. The figures speak for themselves, with over 20,000 people employed in the sector working in approximately 3,000 establishments.
This is an industry which is often underestimated regarding the challenges it constantly faces.
Labour shortages, increases in raw material costs, the rise of food delivery services as well as compliance with legal obligations, including waste management and the Beverage Container Refund Scheme (BCRS), are just a few of the challenges operators are currently facing.
A recent survey commissioned by the Association of Catering Establishments (ACE) on the day-to-day costs and their impact on the bottom line of all operators in the industry flagged an alarming average pre-tax 6.19 per cent bottom line. This clearly highlights the challenges the industry faces which eradicate misconceptions on the industry’s revenues.
The findings further accentuate the challenges the Gozitan catering industry faces. As recently noted by Daniel Borg, CEO of the Gozo Business Chamber: “With a population of nearly 40,000, Gozo is facing critical challenges that demand long-term vision and decisive action.”
Truly so, because, after all Gozitan catering establishments have been through during the past years, a few legitimate questions on the sustainability of the catering industry but more about the government’s vision must be asked. A government vision for the industry as spelt out in the National Tourism Strategy 2021-2030 focuses on the importance of a higher-quality offer.
Quality, an important word which is meant to distinguish Malta and most of all the insularity of Gozo from the rest in such a cutthroat industry. Quality, which should be reflected in the service and product delivered. Quality, which, above all, should be reflected in the tourist travelling to our islands.
Yet, three years down the line since the launch of such a vision, one asks whether the country really has a plan to target quality tourists.
A quick glance at the figures touted by the ministry for tourism and public cleanliness a year ago are misleading. The much-hailed record tourist spend of €2.7 billion in 2023 has been questioned and contradicted by leading economists and players in the tourism sector.
And, as Malta Chamber members Alan Arrigo and Silvan Mifsud noted in a recent Times of Malta article, ‘Tourists are spending less’, there is not much to celebrate. As well pointed out, it is true that Malta is breaking several of its previous pre-pandemic records, yet, the spending power of inbound tourists in real terms has decreased.
One asks whether the country really has a plan to target quality tourists- Alex Borg
Also highlighted in the article, the average expenditure per tourist for January to June 2019 was €726, and, after adjusting for inflation, the average expenditure for January to June 2023 dropped to €705, while the average length of stay has remained the same.
It is also interesting to note that the latest NSO statistics show that, in 2022, there were 129,059 foreign tourists in Gozo (64,687 who stayed in Gozo only and 64,372 who stayed in Gozo and in Malta). This was still less than 2019 (pre-COVID) when you had 180,978 foreign tourists to Gozo (92,715 who stayed in Gozo only and 88,263 who stayed in Gozo and Malta).
The Gozo Tourism Association has also recently expressed its concern on the fast erosion of Gozo’s unique selling points. The accelerated rate of development being experienced in Gozo is also of great concern. This apprehension was evidently expressed in a recent survey carried out among members of the Gozo Tourism Association.
Another key issue flagged by various players in the industry is the disparity between demand and supply. There is currently a lot of supply of hotel rooms – with new hotels being built and extra floors added to existing ones. The demand remains the same but the supply is going to double the number of rooms available by 2030.
As well noted by Arrigo in a recent media interview, oversupply of bed stock is environmentally detrimental and economically unwise. Truly so because when supply of accommodation exceeds demand, there is a downward pressure on operators to lower prices, therefore attracting tourists who have that type of spending power.
This is the state of play of the Gozitan catering industry. This is the state of play which demands tangible action by the government. Quick action for an industry that has proven, time and time again, its ability to be dynamic and its ability to adapt to change. But for how long will this be sustainable?
The industry cannot be left alone. The government must responsibly engage in a serious discussion, together with all stakeholders as well as the opposition, on a way forward which must tangibly ensure the long-term sustainability of such an integral component of the Maltese economy.
A lot can be done with a clear vision and tangible targets. As Borg highlighted, there is a dire need for a visionary regional plan that transcends the temporary nature of many projects in Gozo.
Our over-reliance on construction and real estate, at the expense of a diversified services sector, is a result of fragmented policies and a lack of clear direction.
To reverse this trend, a regional plan tailored to Gozo’s unique needs and circumstances is needed.
It is only with such a vision one can ensure sustainable development, conducive towards the prosperity of the island and its inhabitants.
Alex Borg is the Nationalist Party’s spokesperson on Gozo.