MP calls for tourism product development

Opposition tourism spokesman Karmenu Vella warned yesterday that Malta was falling behind competing destinations in product development.

He also complained that the government was not showing commitment to the tourism sector, as evidenced by the poor state of the environment and the roads.

He was speaking during the budget debate on the Ministry of Tourism.

Mr Karmenu Vella said the tourism sector in Malta had been underperforming since before the September 11 events.

Statistics of the World Tourism Organisation showed that the tourism industry in 2000-2001 grew by six per cent. Yet the number of arrivals in Malta had dropped by 1.3 per cent.

Clearly Malta could not do anything about external factors which affected tourism, such as war and terrorism, a poor economic performance in source markets and mergers affecting tour operators.

Yet Malta also had problems of its own which were not being adequately tackled, such as the poor state of the environment and of the roads, sea water quality, waste management and rising costs. All this showed a lack of government commitment to tourism.

Malta's tourism leaders had said that Malta's tourism product needed to be improved and Malta repositioned. But were these aims being achieved?

Turning to performance this year, Mr Vella said arrivals had dropped by 63,000 and the number of bed nights was down by 700,000 bed nights (7.3 per cent).

Earnings from tourism had gone down 10 per cent to Lm185 million.

Per capita spending by tourists now reached Lm206. Employment in the tourism sector was down by 333. This performance, Mr Vella said, was last achieved before 1997.

He observed that the number of Maltese travelling abroad had declined by 13 per cent and spending by Maltese abroad had dropped by Lm7.5 million.

Mr Vella said that while tourism had taken a knock all over the world following the September 11 events, Malta had also seen its market share reduced as tourists opted for destinations in Eastern Europe.

Although the number of Britons going abroad had risen, the number of Britons coming to Malta had not. The same applied for tourism from Holland. Tourism from Italy had increased by 13 per cent but Malta was not enjoying any of that increase.

From its core markets, Malta had lost more than 45,000 tourists in the first nine months of this year and Lm9 million in revenue.

Mr Vella said that while it was repeatedly said that Malta needed to move away from its sun, sand and sea image, that was what the Malta adverts were showing. So what did Malta really want?

Mr Vella argued that government spending on tourism was still excessively focused on tour operator business.

He lamented the fact that several airlines such as Ryan Air, which had seen strong growth in the past year, were not operating to Malta and Malta was therefore not enjoying some of the benefits of its growth.

He praised Air Malta for having weathered the storm following September 11. It was unfortunate that those people who had worked hardest in the airline had now been pushed aside to be replaced by well-paid foreigners whose companies abroad had collapsed. All this had demotivated the Maltese staff. Should Air Malta suffer the same fate, tourism as a whole would suffer, Mr Vella warned.

He said he could not understand why Air Malta had moved the end of its financial year from March to July.

Referring to the new air services agreement with Germany, he said that one would have expected Air Malta to increase its services to Germany as a result. Yet next summer it intended to reduce its scheduled destinations to four from six, dropping Hamburg and Stuttgart.

He observed that in terms of a European Court of Justice decision, no EU country could reach air services agreements (with non member states) on its own and such agreements had to be reached by Brussels on behalf of the EU. Therefore, existing agreements had to be repealed. Should Malta join the EU it would therefore have to give up agreements with the US, Libya, Turkey and other countries.

Under the third package that Air Malta would benefit from if Malta joined the EU, it would be able to fly between other countries. But what would Malta get for this?

Mr Vella warned that profitability by hotels was continuing to drop even though rates had been cut. The price war between hotels was getting fiercer and something had to be done about it.

Mr Vella said it would be useless for the international situation to improve if Malta did not improve its competitiveness, product quality and marketing. Malta's competitiveness was being further eroded. A decision needed to be taken to improve the product so that Malta could compete on this level, rather than on price.

For next year, the government needed to give greater attention to tourism's needs and not concentrate solely on EU membership. Tourism was one of the pillars of the economy and needed to be treated as such.

The MHRA had warned that product quality in competing destinations was improving faster than in Malta, where little had come of plans for new attractions. Unfortunately the government was failing to back private sector investment, as the sorry state of the environment and the infrastructure showed.

While other countries were offering experiences and not just locations, Malta still had to get its basic facilities up to scratch.

Clearly what was needed was commitment, not just from the tourism ministry, but the other ministries as well, particularly the Ministry for the Environment.

Mr Joseph Cuschieri (MLP), who spoke earlier, said the Malta Tourism Authority had been expected to usher in a new era of prosperity for tourism, but instead of working on new ideas there had only been promotions for NTOM senior officials and recruitment of more staff.

Several government promises had not been kept, such as the one that no construction work would be allowed in summer.

Minister Refalo had offered a series of excuses for the lack of performance in tourism, but some of them could not hold water. This included the one that tourism from Germany had dropped because of the elections - yet an increase in arrivals was actually registered in October.

Dr Refalo used to say that the Institute for Tourism Studies would no longer be a factory churning out certificates. Yet academic requirements for entry into the ITS or the university's tourism course had taken a nosedive.

If ITS students' qualifications were internationally recognised and European workers were not interested in working in Malta due to low wages, this meant that Malta faced the prospect of a brain drain of trained tourism workers. Thus Malta was effectively investing in other countries' tourism sector.