According to the strategy document ‘Recover, Rethink, Revitalise’, by 2030 the accommodation capacity will double. This could have serious implications on infrastructure, and residential sentiment. “Achieving a balance between attracting investment in a modern and enhanced tourism offer to raise standards, while steering clear the damage of excess capacity, remains one of our major challenges,” says Carlo Micallef, Chief Executive Officer of the Malta Tourism Authority.

The winter season has seen significant tourism growth and the summer season is again showing strong indications of another positive performance. But for an island, seat capacity remains of utmost importance.

“While the MTA and MIA work together to encourage existing airlines to increase their operation to Malta by adding new routes and frequencies, the MTA helps sustain the viability of airline routes by allocating marketing budgets aimed at generating demand for the seats floated by the airlines on the Malta routes,” explains Micallef.

Carlo Micallef, Chief Executive Officer, Malta Tourism Authority.

While the MTA’s expenditure for the year 2023 was lower by two per cent than the expenditure in 2019, Micallef explains how the MTA has been focusing on attracting superior tourists and year-round tourism.

“However, we should not oversimplify average expenditure comparisons by simply factoring in inflation and making simplistic comparisons.  According to international tourism statistics standards adopted by Eurostat, tourism expenditure also includes expenditure on air travel.”

“In fact, when we look at the nationality mix comparison between 2019 and 2023 it becomes evident that 2023 featured a southward shift in tourism flows with more Italians and other Southern Europeans visiting Malta and lower numbers of tourists from more distant markets such as UK, Germany and the Nordic countries.”

Can Maltese businesses attract higher spending tourists? Can the authorities incentivise tourism businesses to no longer see investment in improving their product as a cost but as a net benefit in the long run?

“The role of MTA is to improve and enhance airline connectivity and to undertake overseas B2B and B2C marketing activities to generate demand for all those businesses who can respond to tourism demand. However, there are several funds and programs made available through other Government agencies which can be tapped into by operators in this regard.”

More sustainability in tourism

In 2021, the Malta Chamber sounded the alarm that Malta’s tourism numbers aren’t sustainable financially, environmentally or culturally, something that was confirmed a year later by the Deloitte-MHRA report. Can we keep pushing for higher targets? Are we close to saturation point?

“A strong rebound in tourism is a phenomenon that is being felt in many countries but in Malta, we are achieving a more even spread of tourism all year round,” explains Micallef.

“In fact, with arrivals coming from a mix of different source markets, the average length of stay is dropping slowly, pushing the industry to build a year-round more sustainable and profitable environment offering careers rather than seasonal work.”

Recently, Venice introduced the world-first €5 charge for visitors entering the city.

“These charges do not deter volumes and they will be paid by almost everyone who wants to experience a destination like Venice. But they can be useful if they are ring-fenced into a fund that enables better visitor management in the localities concerned, including the introduction of a host of smart management techniques which take the latest technological and AI advances into consideration to maximise visitor throughput whilst minimising negative effects.”

Concern about Malta’s deteriorating competitiveness

Critics state that while Malta is primarily a three-star market, it cannot compete with high-end tourism because it lacks the infrastructure, human capital, shopping and culinary experiences that a high-end customer seeks.

According to Micallef Malta has managed to re-invent and re-create its offer and reposition itself as an attractive destination for a wider range of nationalities, seasons and motivational reasons.

“Malta is no longer the cheap and cheerful destination for price-sensitive tourists but is now attracting wider nationalities and interest groups who are willing to spend more.”

“However, we should never grow complacent. We should continue comparing our offer with the best of our competitors to ensure we continue improving the experience we offer.”

Tourism post-COVID 

COVID showed us that tourism has a certain scale and there needs to be a balance between quantity and what can be defined as quality but niche operations alone, such as luxury tourism or agritourism, will not pay the country’s bills.

“We should never look at types, classes and categories of tourists as mutually exclusive and in isolation from each other. The tourists we attract originate from the same geographical markets and fly on the same airlines from the same airports to reach Malta.

“Over the past years, we have identified travel motivations that suit the destination best in terms of product offer and which are the least price sensitive. We are no longer at the mercy of “take-it-or-leave it” tour operators because while prices in Malta and Gozo have gone significantly up, tourists are willing to pay for them.”

“The industry needs the critical mass of visitors to sustain operations and generate economies of scale. At the same time,  the growing numbers of more lucrative niches will maximise returns and fit within Malta’s unique offer all year round,” added Micallef.

Asked about MTA’s work in attracting long haul routes that usually bring tourists with a higher spending budgets, Mr Micallef noted that while the MTA remains committed to invest resources in markets and market segments that maximise returns for the industry, markets like North America are firmly in its present and future plans.

“We are making all efforts to keep improving connectivity to the Maltese Islands to increasing tourism volumes that make it feasible for airlines to consider direct flights.”

Tables, chairs and construction

The ‘tables and chairs’ saga emerged from wanting to support businesses. But while limited space is being sacrificed for personal business interests the quality of many setups leaves much to be desired. Doesn’t this impact the tourist experience?

“The Ministries responsible for Tourism and Culture have recently appointed a Valletta Management Plan Operational Committee with the express intention of addressing issues such as this one and we are bringing together all the relevant authorities and institutions concerned to address this situation.”

“With regards to construction, this will always impact tourists’ experiences but now that Malta has possibly reached a peak in construction activity, with the new rules and regulations for the construction industry that have come into effect, it is hoped that the situation will gradually improve.

This article first appeared in the Corporate Times.