The tourism industry is in the worst crisis it has even been in the last five decades. This time around, however, the crisis is not so much about the loss of competitiveness or economic stress in the countries from where our visitors come. The prevailing tourism crisis goes beyond economic logic.
The president of the Malta Hotels and Restaurants Association, Tony Zahra, has argued that it may be necessary for the government to consider introducing free air travel for those who may wish to spend their holidays in Malta.
Quite apart from the counter-argument that taxpayers should not have to underwrite the risks of the industry every time it finds itself in a stressful situation, one needs to understand why tourists are not visiting the island.
Few can deny that the majority would be afraid of contracting the COVID-19 infection by exposing themselves to undue risk. Being confined within a compact aeroplane cabin for hours even while wearing a surgical mask is not a risk many would want to take even if the ‘reward’ is a free holiday on a sunny island.
People have every right to fear for their health. They are not impressed by tourism entrepreneurs urging them not to cave in to ‘operation fear’.
So we are not in a situation of being able to stimulate demand by making supply more affordable. In these circumstances, free flights, as recommended by Zahra, are unlikely to produce more demand.
The quarantine regulations for visitors returning from Malta imposed by countries like the UK will, undoubtedly, persuade those considering taking a holiday abroad to assess the risks and inconvenience of travelling by air.
Had the tourism industry been more prudent by not putting pressure on the authorities to open up the economy earlier in the year, we may have had a milder second wave of infections than the one the country is experiencing.
Italy, for example, though badly hit in the first wave, now has a much lower rate of new cases than Malta, going by the ECDC’s 14-day cumulative number of COVID-19 cases per 100,000 inhabitants.
Rather than press for more taxpayer-financed incentives to help hoteliers return to their comfort zone of mass tourism, the industry leaders should be thinking about how tourism is likely to change after COVID-19.
Will people still want to travel like sardines in low-cost aircraft to spend two weeks on crowded beaches and leisure centres? Would they like to pay high hotel and restaurant prices that were determined by the apparent endless demand in the pre-COVID-19 economic boom?
The government has promised measures to support the industry in the coming budget. One hopes that these measures will be aimed primarily at helping those workers who have been badly affected by the economic and medical crisis.
Taxpayer money should never be used to help entrepreneurs avoid the restructuring that the tourism industry needs to go through as it becomes increasingly evident that the business model in place is not sustainable in the long term.
It remains to be seen what strategy the government will be adopting to manage the economic fallout of the pandemic. Whether it will be ‘tax and spend’ or ‘borrow and spend’, the long-term interests of taxpayers of today and tomorrow should never be sacrificed on the altar of economic growth at all costs. The ‘money is no problem’ mentality remains pervasive in some parts of the business community and the political elite.
Our leaders should never forget that money does not grow on trees.