29 March 2006

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Business Today

That sinking feeling

The tourism sector is experiencing nothing out of the ordinary that other industrial sectors of the economy are not experiencing. Globalisation and the fierce competition this is bringing about is a major factor contributing to a lot of the problems the country is facing in manufacturing and tourism.
Having said this, government cannot sit idly and pretend that problems will be solved by simply talking about them. Governments are elected by the people to watch over their interests. Government has to exist for a purpose and while direct intervention in the economy has proven in the past to be a mistaken road, there are instances when the State needs to intervene.
In tourism, government intervention is not only an extraordinary measure but one deemed very important. Marketing the island, setting out a strategic plan to position Malta in the tourist market is something, which government should be pushing along with the stakeholders in the industry.
Unfortunately, the agency entrusted with overseeing the tourism industry has been passing through a bad patch. The reform process has overshot most of the stated targets and in essence, the magical 50,000 growth in tourist numbers has not been reached in 2005 and will again fail in 2006.
Somewhere, something is wrong and the people responsible need to answer for their actions.
Hoteliers and other operators in the tourist trade are experiencing a sinking feeling. They are faced with profitability problems emanating from various sources. Government-induced costs have shot up over the years and the there has been little improvement in the tourist product outside the remit of the private sector.
But there is also another major problem. Travellers the world over are changing their patterns. We can close our eyes and pretend that people are still travelling like they used to do up to 10 years ago but such a strategy will only alienate us from a growing market segment of self-made tourists who simply book their accommodation and flights over the internet.
It is within this context that a solution on low cost airlines needs to be found. Keeping in mind the competition issues at stake government needs to come up with a subsidy scheme, partially funded by the private sector, to slash landing charges across the board. It is useless going round in circles. If we want low cost airlines to come here we have to play their ball game.
The benefit of low cost airlines is the ‘free’ advertising Malta will get through the highly organised internet marketing these airlines operate through. As Winston J. Zahra tells Business Today in the interview today, Malta is not even present on the computer screens of those people who simply log on to Ryanair or Easyjet’s websites in search of a cheap flight out of their country.
The country has postponed the low cost issue for too long and a solution has to be found. If there is a new growing tourist segment out there, Malta needs to take its slice of the cake.
It is however pertinent to insist that low cost airlines on there own will not provide the magical solution to the industry’s ills. The reform process at MTA needs to be speeded up. The organisation still has a lot of fat around its waist and government needs to make sure that every pound spent by MTA is giving the country its worth.
The general package that is Malta, needs to be improved and while it is understandable that the major projects will take time to materialise because of funding problems there are a number of smaller initiatives that can be undertaken at minimal cost.
While government has wasted time proposing a golf course in a site which is highly sensitive for ecological, agricultural, historical and public enjoyment issues, a fraction of the amount of money used to kick start that process could have been invested into organising the Marsaxlokk quay into a bustling fishing port by day and a romantic destination by night.
The proper upkeep of sandy beaches with basic amenities installed for public use needs to be implemented in the major beaches in the north of the island as of this summer. Organising these beaches need not be an additional burden on public finances given the number of access employees on government books.
The taxi service could be liberalised at no cost to government.
There are other initiatives that can be undertaken such as encouraging restaurants to submit their price lists with the MTA on a voluntary basis but with those participating in the scheme benefiting from positive advertising. The MTA would then be able to monitor prices and suggest where it believes items are over priced.
While government has many faults, industry also has to shoulder its bit of responsibility. Some hotels and restaurants are over priced and offer a poor service. This must not be allowed since it harms the island’s reputation.
A concerted effort is required to give tourism a kiss of life. Anything short of immediate action would be the sector’s coup de grace.

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Editor: Kurt Sansone
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