Malta’s tourism is set to be the worst-hit sector in the aftermath of the COVID19 pandemic, according a report released this week.
Thirty-six industry experts were interviewed as part of the 141-page study, known as the ‘Agile Report’.
It describes the tourism industry as going into ‘survival mode’ after the airport was put on lockdown last month and all entertainment outlets were closed. The research, carried out by advisory firm Seed, looks at the effects of the pandemic on various sectors.
The resurgence of the tourism sector is dependent on a number of factors, it says.
“Apart from Malta reopening its own airport, the tourism industry is dependent on other airports opening up and also on the willingness of people to fly and go on holidays. The fear element, especially if a second wave of COVID-19 starts, will have a lasting impact on the propensity to travel.”
The report also highlights how financially overdrawn those who have businesses linked to tourism already are.
It notes that hotel profits had plateaued in 2018 because of the rise in alternative accommodation, such as Airbnb. “With no revenues, companies will be stretched to the limit especially those that are already highly leveraged and exposed following investments in growth and capital.”
Contributors to the report say they believe tourism will be the last sector to recover from the crisis and many companies will have to adapt or die.
We need to concentrate more on quality than quantity
“The post COVID world will be different to the one we know today and we have to be ready to adjust our economy and product in line with this new world,” Tony Zahra, president of Malta Hotels and Restaurants Association, is quoted as saying.
“As a small country we need to concentrate more on quality than quantity.”
Delving into another sector, the report says that professional services – which account for 15.5% of the total economy – are already feeling the shockwaves.
New work from clients has been heavily impacted while advisory projects have been placed on the backburner or mothballed. Professions that require physical contact, such as private doctors, dentists and notaries, have been more heavily impacted than others.
“Digital transformation is going to be key in order for companies to ensure business continuity but also because their expectation is that a larger number of workers will want to have an increased element of home working.”
Those already used to operating in a digital space adapted quickly to the lockdown but they are not immune to the overall pandemic.
The gaming sector is seeing a shift in traffic from sports betting to other forms, including casinos and poker. Firms heavily focused on sports betting have seen their revenues tumbling. In the long run, the gaming sector will also feel the effects of the economic crisis, the report says.
The report also presents a survey on employment carried out with Onest. The majority surveyed believe the economic situation is likely to get worse over time.
Forty per cent believe unemployment levels will increase sharply if the COVID-19 pandemic drags on for two months and 68 per cent if it persists for at least four.
Nearly 60 per cent say their wage has already been affected or is bound to be, while a similar proportion have already had their working days reduced or feel this is bound to happen.