07 July 2004

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Malta needs to secure its slice of tourism gain – MHRA

In a meeting held with Malta’s MEPs on 2 July, the Malta Hotel and Restaurant Association explain what they expect from the Parliamentarians in the years to come.

The main pillar of the Maltese economy is without doubt our tourism industry and we must give this area the importance it merits if we really want to succeed as full members of the European Union. We cannot afford as a country to lose out on this opportunity. MEP’s have an important role to play to this effect to ensure that no stone is left unturned to exploit all the opportunities where tourism is concerned from the EU perspective.
It is envisaged that the number of tourists to visit Europe is expected to double in the next 25 years.
This means an annual growth of 3 percent and an increase of 100,000 new jobs a year. Malta needs to secure its fair slice of this growth and resultant generation of wealth. It can only do so by being more aggressive, planning better and increasing the level of professionalism with which things are done. This would need to be coupled with an overall increase in everyone’s commitment on the Island to make this industry work.
Tourism is not a policy area at EU level. It falls within the Enterprise Policy. A Tourism Unit within DG Enterprise is responsible for this area. This however does not mean that tourism is not given importance at EU level.
The work undertaken by the Tourism Unit of Directorate General Enterprise takes place in the context of tourism's importance for growth, prosperity and employment. Work is based on objectives aimed at improving quality, competitiveness and sustainability in European tourism and its enterprises, and at looking after tourists' interests. This
approach ensures that tourism makes the optimum contribution to the Community's fundamental goals. The Unit pursues its activities in close co-operation with the Advisory Committee on tourism set up of the Member States' representatives, as well as with the
European institutions - the European Parliament, the Council of Ministers, the Economic and Social Committee and the Committee of the Regions. In line with an approach based on consultation and partnership, the Unit also maintains a close relationship with representative organisations of the tourism industry and other stakeholder groups especially when dealing with specific issues. As MHRA we keep close contact with this Unit through HOTREC our European Affiliation Association representing Hotels, Restaurants and Café’s in Europe. We urge Maltese MEP’s to make the necessary contacts with this Unit and to keep abreast of its work and co-operation with the European Parliament. Concurrently we offer the MEP’s full cooperation.
The Treaty of Maastricht included, for the first time, 'measures in the sphere of tourism' in the list of Community activities foreseen in support of the Community's overall objectives. (Note: Article 3(1)u of the Treaty establishing the European Community). However, the Treaty gives no particular guidance for a community tourism policy as was mentioned above, and there is no specific legal base for Community measures on tourism. This means that any act of the Council of Ministers in the field of tourism needs unanimity among all Member States.
One of the main roles of the DG Enterprise's Tourism Unit is to play a co-ordinating role within the European Commission, aiming to ensure that the interests of tourism are fully taken into account in the preparation of legislation and in the operation of programmes and policies which are not themselves conceived in terms of tourism objectives. In practice, many programmes and policies either include a tourism dimension or have a significant impact on tourism-related activities.
These Community schemes have an important influence on the development of the tourism industry, on the interests of tourists, and on the development and preservation of the natural and cultural heritage. In parallel to the above, and in view of Malta’s dependence on the tourism industry, any legislative measure, policy or programme introduced at an EU level will have a direct or indirect effect on the local tourism industry.
Tourism should feature clearly when any decision is taken during any European Parliament Committee. The Maltese European Parliamentarian should always keep in mind the effect that decisions taken at any particular committee will have on the Maltese tourism industry. Again here the MHRA would be more than willing to help support the MEP’s with any information or guidance that may be necessary at any point in time.

Key issues which are currently topical in EU discussions to be aware of.

1 Reduced VAT rates should be applied to all areas within the hospitality sector (restaurant services should also benefit from this reduced rate). MHRA had prepared and submitted to Government a study showing the financial implications of this change.

2 VAT paid on accommodation and restaurants’ services incurred for business purposes should be fully deductible.

3 There have been lengthy discussions on whether the EU mandatory requirement of indication of nutrients (calories, fat, salt, sugar, etc.) should be applicable to meals served in restaurants. MHRA has been informed by HOTREC that following intense lobbying it was decided that this mandatory requirement does not apply to meals served in restaurants.

4 The EU was considering the introduction of a mandatory requirement of indication of the origin of beef in restaurants. This was considered to unduly burden the sector and once again following intense lobbying this requirement has been withdrawn.

5 There is currently a discussion on whether EU rules on hygiene of foodstuffs, designed for the large enterprises of the food industry, should be adjusted to take into account the predominant “micro-enterprises/very small enterprises” dimension of the restaurant sector in Europe. MHRA through HOTREC is closely following this case as it would result in small businesses having to incur additional costs.

6 A current issue being discussed at EU level at the moment is the introduction of a uniformed classification standard for hotels across Europe. HOTREC disagrees with this matter because it will not take into account the individual characteristics and requirements of each country.

7 MHRA strongly feels that a detailed business impact assessment should be carried out whenever a EU proposal that is likely to affect the sector is made or whenever an amendment to an existing regulation / directive is envisaged.

8 In relation to services provided by the hospitality sector, diversity reflects different cultures and geographical situations and constitutes one of the major attractions for customers. MHRA believes that the principle of subsidiary (according to which a problem should be dealt with at European level only when no solution is available on a voluntary basis or via regulation at regional/national level) be fully respected as far as the tourism or better still the hospitality sector is concerned.

A final point relates to the relationship that should be established between the MHRA and the newly elected MEP’s. It is being suggested that a quarterly meeting is scheduled between the MHRA’s EU Consultant/EU Committee and MEP’s to discuss issues pertaining to the hospitality industry within the EU. The objective and the purpose of these meetings will be to keep MEP’s informed of MHRA’s work in this area, and to discuss relevant issues particularly where the Association feels that further lobbying will be needed from the MEP’s. MEP’s will also be forwarded on a regular basis the quarterly newsletter issued by HOTREC.
The MHRA would also be happy to keep MEP’s updated with the quarterly report produced by MHRA on the results within the industry as well as any other report commissioned by the Association from time to time.

The purpose of this short paper is to highlight key issues on which the MHRA believes MEP’s should focus their attention on with respect to the tourism industry at a European Union level. The paper should not be viewed in isolation but should be read in conjunction with the recent position paper prepared by the MHRA on Key Issues facing the Tourism Industry presented to the Prime Minister on 12 May 2004, particularly the section dealing with MHRA and the EU.

Copyright © Newsworks Ltd. Malta.
Editor: Saviour Balzan
The Malta Financial & Business Times, Newsworks Ltd, Vjal ir-Rihan, San Gwann
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