8 JANUARY 2003

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Black clouds hang over tourism, Refalo warns

By David Lindsay

Tourism Minister Michael Refalo yesterday forecast a gloomy year for tourism if the US and its allies were to pursue another war in the Gulf region and if international terrorism were to persist.

And despite the fact that the tourism sector had registered a positive fourth quarter last year, Dr Refalo warned that the fallout from a possible war in the Gulf and further acts of terrorism would undoubtedly have a more disastrous effect than either the 11 September tragedy or the first Gulf War, adding that "black clouds hang overhead".

Refalo also announced that provisional data for December showed a nine to 10 per cent year on year increase in the sector. Meanwhile, the minister added that the incentive and conference sub-sector is also looking up, with Malta being expected to host a large number of conferences in 2003 and with the diary for 2004 also filling up.

He explains, "August and September registered a minimal decrease, while results for the fourth quarter have underlined the industry’s recovery. December is the third successive month when tourism arrivals exceeded those for the corresponding months of 2001. This clearly proves the disastrous effect which the 11 September tragedy had on the industry."

Refalo expressed his confidence that the leisure side of the industry would also register a good turnover next year, but added somewhat more gloomily "the threat of war makes every prediction more of a prayer than a reality".

Refalo, visiting the Intercontinental Hotel while finishing touches were underway before its opening on 18 January, commented how the industry world wide was still weak and had hardly absorbed the 11 September trauma. Consumer confidence was still at a low ebb and a second shock to the industry so shortly afterward would cause inestimable damage to the industry.

"Malta cannot expect to be immune," Refalo commented forebodingly.

Refalo added that even the very threat of war had had an adverse affect on long haul tourism, as travellers were unwilling to venture far from their own country. The minister recalled that an immediate effect of the Gulf War and the Twin Towers tragedy had been the wholescale cancellation of conferences and a substantial reduction in long haul travel.

Refalo said that the UK market’s 2002 performance had been better than that of 1999 and 2000 and showed that aggressive advertising and increased funding for marketing were more effective tools than TOSS subsidised package prices.

The Italian market, meanwhile, had achieved an all time record in 2002; France had all but matched 2001 results while fourth quarter returns for Germany had whittled the downturn to below 10 per cent. All in all, the end of year result in volume terms would, in the circumstances, be an acceptable 3.5 per cent.

"This is the best performance for Mediterranean island destinations and a better than average one for the Mediterranean," Refalo comments on the figures.

Turning to the five star sector, Refalo said that much had been done to improve the visual and living environment in tourism zones. Tourism developments are in themselves catalysts for improvements all round. "The surrounds of this property as well as of other five star properties in the vicinity are proof enough."

The minister said that work was ongoing in Paceville to improve the general ambience but "the trade must do its bit as well. You cannot complain if you yourself are a prime source of the causes for complaint!"



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