Tourism turnaround by Q2 2004
- Lm50 million capital investment in tourism last year
Speaking at the Malta Hotels and Restaurants Associations
annual gala dinner Friday, Tourism Minister Francis Zammit Dimech said
that if the positive economic situation in the EU countries, the US
and Japan prevails, tourism in Malta is due to pick up in the second
quarter of this year.
He also revealed that last year Maltas important tourism industry
witnessed a one per cent loss in tourist arrivals, following other negative
results over the two previous years.
But, according to Dr Zammit Dimech, there was a silver lining to the
dark clouds gathered over the industry for this third year running.
Looking at figures for the first ten months of the year he stressed
that last year, despite the drop in overall tourists visiting Malta
there was nevertheless an increase of 7.1 per cent in the number of
nights tourists spent in Malta with a total of 9,994,482.
Importantly, expenditure by tourists rose by Lm16.4 million to Lm396.2
million, an increase of 4.3 per cent, while per capita expenditure increased
to Lm177.7 from Lm174.6 an increase of Lm3.1, or 1.8 per cent.
According to Zammit Dimechs mostly upbeat message, the good news
is that there was a 7.1 per cent increase in nights spent in Malta.
But, on the flip side, the bad news for the hotels is that there was
the drop of 2.3 per cent in tourists staying in hotels, with 6.1 per
cent of tourists opting for non-hotel accommodation.
On the prospects for this year, Zammit Dimech commented that Maltas
tourism sector partly depends on what happens in the economies of the
countries of origin of the tourists that visit Malta - the United Kingdom,
Germany, Italy and France.
He said that, with the exception of the United Kingdom, the economies
of these countries were suffering and that this economic slowdown affected
the number of tourist arrivals, especially from Germany. Whereas in
the first eleven months of last year tourist arrivals from the UK increased
by 16,337 to reach 437,366, arrivals from Germany decreased by 16,634
or 12.1 per cent, arrivals from Italy decreased by 8,331 or 8.7 per
cent and arrivals from France decreased by 2,917 or 3.8 per cent.
He comments, "Our tourism sector is intrinsically dependant on
what happens in the European countries as over 90 per cent of all tourist
arrivals come from European countries. Figures released in this years
Budget speech indicate moderate growths in the economies of the major
"The German economy is forecasted to grow by 1.5 per cent against
a zero growth in 2003, the French economy should grow by two per cent
against a growth of 0.5 per cent last year, while the Italian economy
is due to grow by 1.7 per cent against a growth of 0.4 per cent last
"It is interesting to note that the economy of our main core market
the UK economy should increase by 2.4 per cent in 2004
against a growth of 1.7 per cent in 2003."
Zammit Dimech expressed his gratitude to the many tourism entrepreneurs
who during the past year continued to show their faith in the sector
by investing heavily in tourism-related projects.
He explained how last year there were 17 projects under construction,
involving an investment of over Lm50 million in new hotel accommodation,
extensions and re-development.
Apart from these projects work was at an advanced stage on three major
tourism projects: the Cottonera project, the Manoel Island and Tigne
Point project and the Cruise Liner Passenger Terminal. These three projects
involve an investment of Lm170 million.
He added that on its part, the government is doing its utmost to embellish
our country. He said that over the past years, millions of liri were
invested on the embellishment of promenades, roundabouts and centre-strips,
on rehabilitation and restoration projects and on infrastructural projects,
including road building and maintenance; and the construction of the
Cirkewwa and Mgarr terminals.
In this years Budget, government announced that it will be providing
Lm10 million over a four year period, earmarked for embellishment projects
which will enhance Maltas attractions. He said that recurrent
and capital expenditure in tourism will now be managed through an ad
hoc account, which will be credited with VAT receipts from hotels
Recalling landmark moments of the year for Maltas tourism industry,
he cited two positive announcements in the latter part of the year:
One being that, "Dietmar Gunz, together with other shareholders,
re-purchased the FTI shareholding from Airtours plc. Gunz, who always
believed in Maltas potential as a tourist destination, is optimistic
that sales to Malta from Germany and Austria can again increase in the
future. With this firm conviction, the Malta programme for Summer 2004
has been enhanced and the seat capacities to Malta have been increased.
Last December, Frosh Touristik launched its summer 2004 brochures to
770 travel agents from Germany and Austria in Malta. FTI have informed
me this morning, that their winter sales for Malta have in fact improved.
"Wolfgang Beeser was last month re-appointed Chairman of the Management
Board of Thomas Cook. Wolfgang Beeser, who is viewed by many in the
tourism industry as one of the few people who can turn Thomas Cook around,
is a friend of Malta."
Zammit Dimech is confident that 2004 offers Malta an opportunity for
long-term growth from the Nordic market, with increases envisaged from
Sweden, Norway, Finland and Denmark.
Looking forward to EU membership, Zammit Dimech stressed that membership
will change Maltas economic environment through increased mobility
and trade liberalisation with other members of the EU.
"The EU will open up for our islands an internal market of 450
million people. Membership will also offer new challenges to our national
airline, Air Malta, which is a key player in the development of our
tourism sector. Following 1 May, Air Malta will be in a position to
embark and disembark passengers in airports on its way to scheduled
destinations, thus making better utility of its seating capacity. He
said that Air Malta already announced that as from 2 May, it would be
operating non-frill flights from Malta to London and from Sicily to
London. In the meantime, Snowflake, a low cost airline, has already
shown interest in Malta and is scheduled to operate from Stockholm and
He adds that, "Even if the past three years represented a difficult
time for us all, these were not wasted. In the past three years, we
re-wrote our strategic objectives involving all stakeholders in the
decision making and Malta is now being marketed as an experience where
a number of niche markets were targeted to overcome seasonality problems."