As expected, the Christmas holiday season brought about a substantial increase in turnover for most business both in Malta and Gozo. The Gozo Tourism Association, the Malta Chamber of SMEs (GRTU) and the Malta Hotels and Restaurants Association reported an increase in business for most of their members, even if there was a shift in consumer preferences.

Gozo Tourism Association CEO Joseph Muscat confirmed that bars, restaurants, hotels and private accommodation providers experienced a busy period bolstered by the flow of both domestic and foreign tourism. He argued that business was boosted by a campaign organised by the Gozo Ministry and other stakeholders.

Philip Fenech, president of the GRTU’s tourism and hospitality section, described the holiday season as a “mixed bag” for businesses, despite largely positive feedback overall. He made an interesting comment: “Supply has grown tremendously and we’ve seen a shift in consumer behaviour.” Businesses in the capital have benefited from the Valletta 2018 activities but probably lured some business away from other localities.

MHRA president Tony Zahra too reported positive feedback from members. He attributes this to the higher availability of seats on Malta-bound flights when compared to previous years. Good weather may have also helped with an increase in last-minute bookings.

So far, no statistics have been published on sales from retail shops that usually experience a boom at the end of the year. It will not be surprising if sentiment here is again being affected by consumers changing behaviour. Online shopping has become a big reality as better logistics have improved delivery times for those who prefer to cybershop rather than face the traffic congestion on their way to the local shopping centres. Not to mention prices too.

Undoubtedly, the influx of tourists in 2018 combined with the effects of a fast-growing economy to boost the positive business sentiment. The question of over-tourism and its effect on the infrastructure and the environment will be raised by those who take a long-term view of evolving social and economic trends. Some will argue that the increase in tourism numbers is leading to the rule of diminishing returns. The increased social and economic costs to accommodate more tourists in an already overpopulated island may be diminishing the added value the country gets from the industry.

This year’s bumper holiday season has also raised issues with regard to the service provided by Gozo Channel. It seems three ageing vessels are inadequate to cater for the peak season demand for crossings to and from Gozo. It may be time to hire or buy another vessel to avoid delays.

As long as the economy continues to grow at a fast rate, demand for catering and entertainment services will remain high. Those who invest in businesses that provide such services will take the long-term view when deciding how much money to sink in their enterprises. Increased competition will lead to better service for consumers but could spell a profitability downturn when general demand falls.

In good times, people tend to forget that economies run in cycles. Malta is experiencing the upside of a positive economic cycle boosting consumer confidence and spending. Businesses are benefitting from this phase but they will do well to underpin their strategies with resilience planning for when the economic climate becomes less favourable.

This is a Times of Malta print editorial

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