Hold your horses on upmarket tourists, says Fortina owner

Hotelier Michael Zammit Tabona is calling for heads to roll at the Malta Hotels and Restaurants Association, following its president’s endorsement of the Corinthia Group’s plans to prioritise upmarket tourism.

“MHRA president Matthew Pace should vacate his post,” Zammit Tabona said on Friday - just a day before Pace actually resigned over a tampered energy meter. “Because he had absolutely no right to back the idea of targeting upmarket tourists without consulting his membership. He has to resign, and with him, whoever wrote his speech.”

Pace’s comments were made at a speech at the Institute for Tourism Studies, where he heralded Corinthia’s plans for a six-star hotel to attract visitors from the more expensive, upmarket demographic. “He said that with the market numbers now in a region, Malta can start attracting new upmarket tourists,” MHRA director-general Andrew Agius Muscat said. “Of course, not at the expense of core markets like the British holidaymaker.”

But Zammit Tabona firmly believes that the way forward is to build on the current tourism product and attack new markets, rather than re-orientating towards upmarket clients.

He is convinced that the status quo as win-win. “Why fix it if it isn’t broken?” he asks.
“Had the MHRA president consulted his members in Sliema, St Paul’s Bay, Bugibba or St George’s Bay they would have asked him if he was going mad,” added the Fortina Hotel and Spa owner.

Not everyone agrees with this, however.

In comments to MaltaToday, Eden Leisure Group chairman Ian de Cesare said he believes that it makes more sense for the local product to attract wealthier individuals than to increase numbers. 

“Critical mass has been reached insofar as numbers are concerned and the tried and tested formulae now need to be tweaked”.

De Cesare believes that there is a demand for a number of very high quality suites, which Malta currently lacks. “Numbers are always required: we have the largest five star hotel on the island, so I obviously don’t advocate reducing the numbers of visitors, but we also need to increase the quality of our output to continue to attract the right type of visitor.”

The Eden Leisure chairman explains that the InterContinental is aiming to satisfy demand for “high-end five star” (he doesn’t like to use the term “six star”) holiday accommodation and ties this in with the Individual Investor Programme launched earlier this year.

His view is shared by Corinthia Group chairman Alfred Pisani, who is on record stating he believes that targeting the luxury tourism market is the way forward now that the local tourism industry is doing well.

Pisani claims that visitors’ expectations are now higher than in the past, a fact which, he says, must translate into hotel owners investing more in their properties.

On their part, Corinthia are investigating the feasibility of opening Malta’s first six star hotel after 2016. “For Corinthia it would be a tremendous satisfaction that we should, following half a century from our inception, provide Malta with a unique hotel property of a quality superior to what we have seen up to now,” Pisani says.

“We will develop the most attractive hotel and which will be serviced to optimum levels… Such a project requires time before actual work can start on site, in fact we do not expect construction to commence in the immediate future, for sure not before 2016.”

Ultra luxury is not the only area where investment is taking place, however. De Cesare points to his plans to open a Holiday Inn Express in 2016 to effectively cater for the three-star market.

Not just ‘bucket and spade brigade’

But Zammit Tabona argues that six star hotels will only attract a tiny minority of millionaires who should not be targeted at the expense of the majority.

“This is a bad idea… Not only would this have a negative knock-on effect on local tourism-related businesses who depend on volume, but rates for ultra-luxury hotels would eventually also have to be cut due to lack of demand and this could negatively affect rates across the board.

“Malta is not London – we can’t mix what we are selling in Malta with London. Travel to London is mostly corporate – business, popstar millionaires, football clubs.”

“How would you define an upmarket tourist?” he asks, citing examples of footballers coming to Malta and expecting to stay for free. He insists that it has been tried before and failed.

When it comes to family holidays, Zammit Tabona believes that value for money is the deciding factor.

“Families of four-five persons coming to Malta on budget airlines for Christmas will definitely not want to spend €400 a night.

“We have a winning formula that has given us growth over the past years. The country needs to continue expanding – we need to attract two million people a year. It’s not just the hotel beds, it’s the dependent industries: bars, clubs, restaurants”.

The multimillionaire market targeted by 6-star resorts do not respond to conventional advertising, he adds. 

“In those circles advertising is done by word of mouth. When A-class celebrities come to Malta, they usually rent out villas – Zammit Tabona cites Brad Pitt and Angelina Jolie as being cases in point.

“Let’s forget this upmarket nonsense. The market can afford the increase. Let’s also forget that Malta is a downmarket destination for the bucket and spade brigade”. 

He points out that rates in Malta are not the cheapest in the area: Tunisia, Spain, and the Canary Islands are cheaper. “It is now up to the MTA to ensure that we’re chocker-locker full.”

Chinese market

The status quo certainly appears to be working. According to a recent survey carried out by the MHRA, occupancy levels had increased across the board by 3% and rates charged per room had improved by 7.5% on average in 2014.

In a statement issued earlier this month, the association said 2014 had been a bumper year for the tourism sector and could even end up setting a record.

Zammit Tabona claims the future lies in conquering new markets. “We are competing not only with Europe but the rest of the world. We are trying to crack the Chinese market, but we are losing ten nil in the first minute of the first half because of the lengthy visa process. It takes 15 days for a Chinese tour operator to apply for a Schengen visa,” he explains.

Zammit Tabona believes that the Chinese window of opportunity is closing and the government and the minister need to act fast to open up China. “Malta is currently being featured in a large number of Chinese tour operators brochures, but because of the visa situation, they are starting to prefer to go to countries that grant visas in two-three days.”

He remains hopeful that the visa situation will be resolved soon, but warns “this is our only chance to open China – we are in the 2015 brochures but if the Chinese do not book the holidays we will be out of those brochures in 2016”.

The views contrast sharply and predictions for the direction of growth vary, depending on the person asked. The future of tourism in Malta is a race in three heats: quality versus quantity, new markets versus upmarket, value for money versus ultra luxury, and as cliché as it sounds, only time will tell who is gambling on the right horse. The only certainty, it seems, is uncertainty.