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Tourism is in an awful state. It is at a crossroads and in need of fast long term decisions. Beyond the resignation of Chairman Romwald Lungaro Mifsud at the Malta Tourism Authority, there have been public calls for his and the ministers’ resignation by Winston Zahra Junior. In reality the whole industry and the way it is operated is in dire need of an overhaul.
The targets set by the government to attract an extra 50,000 tourists a year remain only nice figures on paper – last year we only got 32,000 more. Raising the target this year to 70,000 will not bring one extra tourist, as much as wishing inflation to go down will not lead to lower prices. Targets are not achieved just by announcing them.
We must rethink our operating model. Essentially all the stakeholders, government operators and the public have taken this industry for granted presuming that the annual arrivals and their spending power would automatically increase. Nothing could be further from the truth.
We have constructed large, expensive to run hotels but forgotten about the ancillary services.
While all presumed it was business as usual we lost market share to our competitors.
We made only minor adjustments and short term fixes. We made little amendments in the way we operated the industry and were oblivious to the sea of changes taking place in the industry. Tourism went and is going through a fast global change. It passed all over our heads and now we are suffering the consequences.
The fundamental changes include the increase in direct bookings and the consequential decline of an industry depending on the tour operator, the explosion of low cost airlines, short weekend breaks and the increased attraction for long haul travel.
The fact that the present government and the whole industry were simply caught unawares is proof of the abysmal lack of planning and vision. We remained tied to the tour operators who kept reducing prices while operating costs kept increasing. We were totally absent from the direct internet global selling network and we offered few attractive short break holidays. We simply missed the bus.
The way forward involves investing heavily in direct marketing tools which the authority albeit belatedly is beginning to do and to upgrade the product. Malta simply has to go up market. Quality and not quantity should be the guiding criterion. While many remain sceptical it is clear from the success of a handful of five star hotels, whose owners incidentally are calling for no resignations, that this is the way forward. Malta has to position its product onto a higher plain or die. Hard decisions need to be taken at government level, people will get hurt, it may sound unkind and cruel but the days of cheap and nasty products in our tourism package are over.
We either upgrade the product and most especially the management of the product or die.
The way forward is upmarket. Upgrading the product effectively means more five star hotels and phasing out the three star places of accommodation or finding them an alternative use. There is simply no chance of these places surviving with the bottom prices being offered to them by the tour operator. Inevitably, some will be converted into flats, as is already the trend.
Decisions need to be taken and fast. The Malta Hotels and Restaurants Association is right to insist with government to decide on low cost airlines. This newspaper has always advocated that we encourage this phenomenon. They are the fast growing trend in modern travel. Allowing them and indeed encouraging them to travel to Malta is another necessary cog in the travel machine. Low cost does not necessarily mean down market travel. Low cost means opening up our country to the enormous potential of new visitors to Malta. The operators are connected with millions of their clients on a daily basis. At present Malta simply does not feature in this network. By being connected our country opens up to millions of travelers browsing on the net in search of holiday travel destinations.
The problems inflicting the industry are also of a management nature. The industry is also in dire need of being managed professionally. Presently, the service being offered by the very people who do best in tourism is simply not up to scratch. The whole industry needs to be liberalized so that the positive element of competition is introduced. The taxi service, the public transport service, the behind counter service and most especially the service offered by waiters, all need to be upgraded. In the absence of correcting these shortcomings, attracting high spending tourists will remain a pipe dream.
The perception of Malta as a shabby, dirty and permanent building site also needs urgent addressing.
For example the regulations barring building works in tourist zones during peak summer months is positive but not sufficient. Serious thought needs to be given to extending these regulations throughout the whole summer period. This also applies to works carried out by government public works sections which are not of an urgent nature. These works are a scar on the industry. It requires much patience and attention to operate a tourism industry concurrently with a booming construction industry.
It is time for Dr Gonzi to take decisions and the operators to upgrade their product and all of us to realize that tourism is the responsibility of each and every one of us. If tourism declines we all go down.
It is that serious.
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