In light of the excitement surrounding the establishment of current and future tech-based industries in Malta, notably iGaming and blockchain companies, the tourism sector’s role as one of the pillars of the Maltese economy risks being overlooked. The tourism industry, however, is booming; what’s more, the sector – previously regarded as largely a summer-only industry is rapidly becoming a more stable, year-round business.
“Figures from recent years confirm the huge progress the country has made in achieving a more even distribution in the volume of tourists visiting the islands throughout the year,” states Gavin Gulia, Chairman of the Malta Tourism Authority. “The total number of tourists attracted to Malta in Q1 of 2017 is close to the volume generated in Q2 of 2010, whilst the figure of total inbound tourists in Q4 of 2017 surpassed that of Q3 of 2010. This goes to show that while seasonality is still a concern, it is being gradually eradicated.” These figures are supported by statistics issued by the Malta International Airport, which show an average of around 20 per cent increase in traffic year-on-year for each of the last four years for the period of December to March, with arrivals in January and February close to doubling since 2015.
Dr Gulia shares statistics that further indicate a huge increase in tourist numbers in the first few months of 2017 compared to 2016, most notably a 24 per cent growth in inbound tourists over Q1 and a substantial 46 per cent increase in January alone. According to Dr Gulia, a change in strategy supported by the MTA and the Ministry for Tourism is a contributing factor. “Early ventures in promoting Malta as a tourist destination were based on the assumption that the UK was the obvious and natural source market, and that British tourists wanted a Mediterranean version of home. For many years, the major emphasis remained on the coastal dimension and the cultural aspect took a backseat role. For a destination like Malta, blessed as it is with a 7,000-year unbroken line of human development and activity, cultural tourism needed to rise to become a very important cornerstone of tourism strategy.”
Cultural tourism has indeed been a major focus for the tourism industry as a whole, as Dr Gulia highlights. “Today, the Maltese islands host over 400 varied events throughout the year. These range from musical festivals to general music events, as well as sporting and cultural events. The MTA, together with the Ministry for Tourism, have recently been focusing on festival tourism, a growing niche in the industry. The majority of these festivals happen outside the busy peak months of summer, thereby attracting visitors during all months of the year.”
Simon de Cesare, President of the Malta Business Bureau and hotelier, sees the rapid growth in shoulder month tourism as deriving from a number of sources. “The current reality is very different to what is was a decade ago. Traditional summer months always fared well due to the type of holidaymaker we were attracting. The trick was and remains how to fill the gaps in the shoulder months and the low season. All stakeholders have worked tirelessly to address this. Hotels have looked at other markets, namely ones targeting cultural tourists, as well as corporate events, such as conferences and incentive trips, while Government has sought to increase connectivity through incoming airlines. The expansionary strategy of Air Malta, as opposed to previous strategies of containment and downsizing, is also helping in terms of seat capacity.”
Mr de Cesare believes, however, that a problem may arise in the not-so-distant future. “The concern today is the number of new hotels coming on the market within the next few years. Malta has never had such a period of continued growth in tourism but although this doesn’t appear to be abating, one has to consider that the number of incoming tourists cannot continue to grow due to the limited size of the island. At some point, these numbers will stop increasing and may even reduce. At that point, one has to wonder what will happen to the oversupply of beds in our market.”
George Micallef, Senior Vice-President of the MHRA and a hotelier, brings to the fore another challenge which continues to rear its head. “At a time when the industry is struggling with problems related to the short-supply of human resources,” he argues, “employers are finding it increasingly difficult to sustain the necessary levels of employment required for higher year-round occupancies. The winter months used to be the time when stretches of vacation leave are taken by employees, and a time devoted to the upkeep and maintenance of the properties. Higher occupancies during the lean months now pose a challenge which needs to be addressed.”
Mr Micallef is nonetheless positive about the current market situation, claiming that the spread of tourism to the winter months is widely welcome as it offsets the massive strain previously put on all members of the industry during this period each year. “Malta nowadays distinguishes itself from other traditional Mediterranean destinations and is marketed as a cosmopolitan, sophisticated city-type destination, with a rich cultural base that offers a range of active holiday choices and appeals to a wider range of interests and age groups.”
Genevieve Abela, Chairperson of the Executive Committee for the Tourism Business Section, is also positive about increased activity in the sector during the shoulder months. “The beauty of this kind of growth is that the spill-over effect ensures that business flows to both larger and smaller businesses alike. These include the surrounding community, restaurants, convenience shops, private transport service providers, artisans and so on. The businesses that are most flexible to exploit market forces early enough and adapt accordingly will end up thriving.”
Dr Gulia underlines another spill-over effect of the shift in tourist arrival patterns. “One element contributing to the move away from specific types of tourist is the novel types of accommodation available, ranging from boutique hotels and small guest houses to self-catering accommodation, all pertaining to the concept of a shared economy. Tourism is absorbed and spread within a wider territory, as opposed to the previous geographical concentration over two or three major areas on our islands.”
However, Ms Abela highlights one of the greatest challenges brought about by higher visitor numbers, one which has significant implications beyond the tourism sector. “There are approximately five tourists coming over to Malta for every person that resides here. Having an all year-round business reduces seasonality issues and as a result certain services are gridlocked by demand. The increase in shoulder month tourism and in the number of tourist arrivals during peak season, takes its toll on the current infrastructure, which now needs upgrading to cater for this growth.”
She adds that a strategic plan for services such as transport and tour guides is required. “With the introduction of free transport for students, we’re experiencing an untenable situation with regards to transport availability and exclusivity for tourism services. Shared transport, both in terms of scheduling and quality service, has created a critical situation that needs to be addressed. On the other hand, we are seeing a decrease in the number of tour guides and thus availability, and just as importantly, the variety of languages offered. Whilst most applaud Government and private sector initiatives to attract new markets, there needs to be a holistic approach which also considers services that new markets need. Guides available beyond the traditional English, Italian, German and French are limited
Despite the challenges and concerns voiced by the spectrum of business figures, the overall message is that the future looks bright. Every corner of Maltese business, from the more direct players such as restaurants and entertainment providers to less obvious beneficiaries such as convenience shops or even hair salons, is receiving a welcome boost. Towns dependent on tourism, such as Bugibba and Qawra, previously famously and visibly quiet in the winter, have the opportunity to thrive year-round.
For Dr Gulia, the MTA as well as the Government, this has been the goal all along, and suggests that further investment will be made in the future. “The most important element in dealing with increased numbers is to ensure that the host community derives direct benefits. It is imperative to avoid situations whereby the host community bears the brunt of a huge volume in terms of tourism but does not benefit from any direct economic, financial or social impacts. On the contrary, right now Maltese communities stand to gain directly.”
This article originally appeared in Business Agenda