The Golden Mile

The area comprising Paceville, Portomaso and St George's Bay is considered to be Maltese tourism's Golden Mile. The St George's Bay area has Malta's highest concentration of five-star hotels. It is the best success story in our tourism industry. In the last 10 years the area has established itself as an international conference destination, competing with other major resorts both in the Mediterranean and world wide. The five-star and a smaller number of five-star hotels together represent an investment of some Lm150 million.

All the hotels represent new private sector investment. Local banks and local bondholders backed the financial participation of this investment. The hotels enjoy the operational and marketing support of major international hotel chains and are branded accordingly. Unlike other segments in the accommodation sector, the five-star hotels have generally been successful in avoiding excessive reliance on tour operator business and have achieved a balanced market mix. This gave rise to an above-average economic performance per capita in line with Malta's tourism policy to increase earnings rather than volume.

The Malta Hotels and Restaurants Association is appealing for an upgrading programme for this area as a high short-term priority. It is a high profile example of private sector investment. It is not being supported by Government. The picture depicted by MHRA is of a tourist stepping out of a five-star hotel into a two-star street environment. This situation surely weakens the experience of tourists, especially if they happens to be attending a conference and are accustomed to red carpet treatment all the way.

It is emphasised that upgrading the beach in this area, the street appearance and street management is extremely important in view of the concentration of conference hotels. The Golden Mile needs road resurfacing, street furniture, street lighting and vegetation in strategic spots. Landscaping is especially important in a bleak dusty littered environment.

The appeal is bolstered by arguments that the association is not simply asking and pressing for government expenditure only. It is being mooted that the improvements would in the long run mean an improvement in room rates. This possibility would result in an improvement in government revenue. This increase in revenue is the quid pro quo being proposed in return for official expenditure.

Restrained requests

In making suggestions the MHRA declares that it is well aware of Government's financial deficit. This awareness is reflected in its requests which are restrained accordingly. The requests consist of extension of the lower VAT rate to restaurants, following the example set by Italy, Greece and Spain. France is actively considering such a step.

There is now a proposal by the European Commission to the European Parliament to allow all member states to opt to apply a reduced rate of VAT on restaurant services.

The Malta Tourism Authority is almost exclusively responsible for marketing and advertising activities. It is being proposed that a tax incentive be made to encourage the private sector to carry out its own responsibilities in these spheres.

It is argued that funding for advertising is actually government's investment and not the unproductive expenditure in the tourism industry.

Roads, water and electricity

Road repairs and resurfacing in tourist zones should be given priority in the interests of a good image of the environment in Malta. It is most appropriate to maintain a five-star impression of tourists coming out of five-star hotels.

Everyone expects a regular supply of water and electricity. This is the responsibility of the central government. In the event of problems encountered in the supply of potable water and constant electricity supply in the St George's area, it is suggested that ad hoc measures by the hotels for the provision of a regular and reliable supply be supported by generous fiscal aid and direct assistance.

If the hotels in the Golden Mile were situated elsewhere in the Mediterranean the operations would be more profitable because of higher room rates. But such an argument has a chain-like effect. Rates cannot reasonably be increased because of the unacceptable condition of both the immediate and general environment. This in fact leads to a corollary argument. A better managed environment would benefit both the local population and specifically enhance the position and marketability of the local tourism sector.

Film industry

The film industry generates significant revenues for the local economy. This includes a handsome return for the hotels and restaurants sector. This is especially welcome when it happens in the low season. The competing countries offer attractive fiscal incentives to win this type of business, such as VAT refunds.

In this context comparisons are not odious. It is worth Government's while to study the fiscal incentives offered by competing companies and to introduce something on similar lines to ensure that Malta offers both a financial and a physical product in this sphere.

Economic growth

The hotels in the area seek Government's consideration of the present situation and expect support for embellishment of the area. The Sliema seafront as far as Spinols Bay has been satisfactorily upgraded and turned into a pleasant promenade. This is practically adjacent to the Golden Mile. It is only reasonable to expect a similar treatment in the area which is handsomely helping the economy.