Hon Francis Zammit Dimech, Minister for Tourism and Culture addressing conference

Opening Address

Hon Francis Zammit Dimech, Minister for Tourism and Culture

The Malta Tourism Authority’s annual conference is the ideal occasion for the tourism stakeholders in Malta to critically review the performance of our industry in relation to what’s happening regionally and globally. It is the occasion where we look back and compare what we hoped to achieve with what we actually achieved. It is an event for the Authority to define its future targets and delineate the route it intends to take to achieve these targets. Successive Ministers have used this occasion to concretely re-confirm government’s commitment towards this industry.

I wish to depart from this tradition not because our commitment towards this industry is less than it ever was. There were numerous occasions lately where Government, even at the highest level, has stated clearly and unequivocally given that commitment which I reiterate, and emphasise that tourism is an economic cornerstone of our economy and one of the pillars for future growth. Government is indicating tourism as a whole as one of the six areas where as a nation we deserve to achieve together excellence, and to make sure that we are moving in that direction as of now – as we are stating with regard to the other five areas identified by Government.

Given and reiterated that commitment, I feel it would be more useful today to put across our vision as a government of how we see the industry developing over the coming years, of how we are working to ensure that Malta is in line with the developments that are happening around us. I will talk about the changes we wish to push through to ensure that our tourism industry is based on the hallmark of excellence.

The mention of the word excellence will probably trigger in the minds of some of the people present here today examples of where our product delivery is anything but excellent. I will be the first to state that we still have to cover a lot of ground to get to this promised land of excellence. But I am heartened by the fact that when I look back I see behind me a long road covering many milestones that mark our advancement towards this goal. These milestones where achieved through the hard work and investment of both Government and the private sector. Together we have changed the visible and intangible state of our country. We have, over a relatively short time, moved from being a time-warped country to a country which is at the leading edge of technology, has an enviable education system, with a health system that is amongst the best in the world and a quality of life that is earning us labels such as the happiest country on earth or the ideal place to retire to. We have come a long way and I am sure that our inventiveness and will to succeed will spur us to further achievements in the days ahead.

What are the challenges facing our industry today? A study published recently ranked the competitiveness of the tourism industry in one hundred and twenty four countries. Malta placed twenty sixth. During the Tourism Ministers’ meeting held two weeks ago in Berlin, the Consultancy Agency responsible for this study gave an overview of how they set about carrying this study. The European countries that ranked in the first twenty places have a high GDP and essentially see tourism as a means of protecting their economic wealth. The lower ranking countries see tourism as a means of generating economic wealth. Interestingly there are a number of countries that fall between these two groups. Many of these are Mediterranean countries and yes Malta is one of them. We are investing more than the average countries in our industry, we have a GDP that is higher than the mean but we are clearly in a state of transition.

Allow me to give you a few examples of the changes that are taking place. Up to a few years ago we used to consider a viable tourism initiative only if it directly delivered tourism numbers. We dealt with tour operators, ensuring that Malta was placed on their brochure and that they produced the numbers year in year out. The final objective of our efforts was to improve the three important tourism indicators: tourism earnings, visitor numbers and hotel occupancies. These indicators remain just as valid today however we have started looking beyond the obvious and immediate link. We are following policies that deliver also, even if perhaps not primarily, tourism benefits. This is a characteristic of those countries that are in the top positions of the tourism competitive league. Let me explain by way of example. The objectives of the Smart City project are clearly not primarily rooted in tourism. However this project will create a new tourism flow into Malta. The new hospital will set even higher standards in our health sector. This can and will surely bring an increase in medical and health driven tourism. A substantial percentage of travel today is not leisure driven. People are travelling for other reasons. We have to provide them with a reason to come to Malta. That reason could be doing business in Malta; that reason could be learning in Malta; that reason could be seeing your favourite artist perform in Malta; that reason could be taking part in a sports’ event in Malta. To succeed in these efforts we need to offer a package that makes it worth the effort for the traveller to choose Malta. This is where excellence comes into play. If we offer the best then travellers will choose Malta.

We must of course continue to target also the leisure market. In doing so we are adapting to the changing nature of the industry. We acknowledge the importance of internet and cheaper travel in the decision making process of the prospective traveller. Over the past months we took decisive action, action which produced immediate results. Yesterday, I announced that Government accepted the Ryan Air proposal to operate four new underserved routes. Total take up of our latest offer meaning three additional routes from Girona, Stockholm and Bari as of the end of October, and before that – from Bremen as of September 25 is evidently positive news for which we have worked hard together. The low cost component of our tourism mix is growing at a good rate going from practically zero two years ago to close to a likely 16 per cent by the end of next year. Some might say that this is not fast enough and that some countries are cashing in faster on this trend. I say that a big bang approach was too risky for our circumstances.

Access to Malta is one of the challenges we addressed over the past months. As a result of our efforts we have seen a substantial increase in the airlines (and as a result airlines seats) flying into Malta. Of course that is only half the challenge. The other half is to fill those seats. I am sure that during the course of the day, we will hear about the marketing and advertising efforts undertaken by the Malta Tourism Authority to make our product offering known. I am particularly interested to follow the Media Consulta presentation. This company is now responsible for improving the perception of Malta as a travel destination in our core markets. I look forward to seeing the Malta Tourism Authority and Media Consulta work hand in hand with the local tourism stakeholders to ensure that we get the highest possible return for the twenty one million euros we will be spending over the coming three years.

In our discussions with the private sector consultative group leading to the publication of the National Tourism Plan, we dealt extensively with the product issues. Again a lot is happening ranging from road upgrading works to major infrastructural projects. Our small size increases the inconvenience caused by works in progress. However there are ways of limiting these inconveniences and the recently published building site regulations can go a long way in this regard. The new round of European Regional Development Funds will bring about a new investment boost in our product. My Ministry has prepared a number of projects which we hope to implement over the coming months. In our efforts we will be paying particular attention to the needs of the more vulnerable sectors of our industry: the tourism operators in Gozo and St Paul’s Bay area, the three and two star hotel sector in particular. We have already taken steps in addressing the particular problems faced by these operators and will intensify our efforts in the coming months.

Over the past months we have armed ourselves with the tools necessary to compete in the highly competitive environment that surrounds us. I am sure that during the course of the day’s presentations we will have the occasion to see what was achieved and what is being planned. I also hope to have the occasion of listening formally and informally to the views of the tourism operators that are present here today.

Even if we have come a long way, we acknowledge that there is still much further ground to cover together in the coming months. In particular we need to anticipate as well as immediately monitor new travel trends that could well effect tour operator traffic to our country and assess at the same time whether or not the new low cost carrier intake is sufficiently compensating for the diminution of the former and ensuring growth.

We are well aware that there is much scope for further growth, and that ultimately this can only be achieved through the pouring of additional resources provided that these resources are then used wisely. I am confident that the Authority is proving that it can use those resources wisely and the fact that over the first three months of this year, we had 7% more tourists who in turn spent 10% more in our country proves that the Authority is sailing in the right direction.

Still even a ship sailing in the right direction needs more fuel not only to sustain the course it has embarked upon, but also to pick up additional speed, and be well equipped to brave any turbulent patch that it might come across. This is what I consider as the bottom line of my own commitment towards the Authority, through it towards the tourism industry in general, as well as towards the national economy as a whole. Every lira – every Euro - spent well in favour of tourism is to be considered as a sound investment.

Let us also bear in mind that a ship sailing in the right direction constantly needs the utmost teamwork between all members of the crew on board. That is why Government, the Malta Tourism Authority as well as all stakeholders have to act in tandem, together. When I emphasise the need to work together, I also remain committed to the Consultative Group that I had set up from amongst the leading stakeholders of the industry. It is with the input of that Group that we have drawn up a national Tourism Plan that is being implemented not only for the sake of the industry but for the country as a whole.

If some elements opt to pull in a different direction, then the overall direction is impaired and hindered for all. I have recently seen the report carried out with regard to three star properties. It is an issue that needs addressing. There are properties and properties. To put it mildly, it does not result that there has always been the same or consistent standard of care and maintenance of all such properties as the industry requires. We need to distinguish between those who do care and offer their utmost and some others who could and should do more for their own sakes and for the sake of the industry as a whole.

As long as we understand that we’re in it together and that we need to act more collectively than individually, then there can be the growth that we all rightly aspire to. The old saying about either swimming or sinking together assumes new relevance. I for one will always be available for each and every stakeholder within the industry, without distinction. I remain committed to the belief that it is only by working in one direction together that we can maximise growth. There is really no other option. This is then a dynamic industry where the privilege of sitting on one’s laurels does not exist. There is only one direction in which to head and for which we must keep on working hard – and that is ahead. What more can we do? What are our next steps? How can we ensure more growth that does not merely depend on the volume of arrivals, but also on amount of bed nights, level of expenditure, room rates, gross operating profits, value added, and yield?

It is on this precise note, that I wish the Malta Tourism Authority and all those present today a successful event.