Mur Lura
POINTS FROM CLOSING ADDRESS BY THE HON. DR. MICHAEL A. REFALO, MINISTER FOR TOURISM, AT THE MAITA CONFERENCE 2001
pr1788
27/11/2001
27/11/2001
OBJECTIVE: MAINTAINING AIR SEAT CAPACITY
| These are not auspicious and encouraging times for | the international leisure industry. Following the 11th September attacks on America, travel agents, whether Maltese, British, German, Italian or French must do their utmost to cope with the fallout. |
| As if the economic slow down and difficulties | encountered by the US and Japan were not enough, a situation which negatively impacted on the economic performance of Europe, international travel and tourism finds itself in the midst of the worst crisis that the leisure industry has ever experienced. |
| There is only one thing certain. The dust will take | very long to settle. |
| At this moment in time one can only attempt educated | guesses based on optimism and a lifetime’s experience in the industry. We have no benchmarks to measure performance and prospects. What happened in New York and Washington was a terrible, tragic first. The ensuing troop build up and war on international terrorism bears no resemblance or parallel with the week long Gulf War. |
We are in a different ball game.
| Earlier this month I had the honour and privilege to | sit on the World Tourism Organization’s Committee entrusted with monitoring the effects of the crisis, with proposing remedial strategies and the industry’s revival and recovery. Today I wish to share my experiences with you and discuss the findings of the Committee’s first meeting in London. |
| We were all agreed and convinced that the leisure | industry has developed a capacity to adapt and survive. Tourism has extraordinary resistance and a great spirit of resilience. It may be the first to collapse but equally so it will be the first to blossom again. |
| The use of passenger planes, not least the ease with | which they were taken over by the terrorists, has generated hesitation among the travelling public and a fear of air travel. The general public’s apprehension is very noticeable. This month I had a number of occasions to experience the fear factor at first hand. |
| Never before in my life have I seen Heathrow, | Leonardo Da Vinci, Zaventem and Athens airport so deserted. Yes, we are in November, not the most popular month for travel by Europeans, but it is a month when Japanese and travelers from Latin America visit Europe. They were very conspicuous by their absence. |
| Following the first wave of cancellations, especially | of long haul trips, business, conference, incentives and group travel, the industry is currently seeing some movement and late booking behaviour. There is still however an overall weakness in new reservations and a tendency to postpone travel decisions. |
| The crisis has had a severe impact on long haul | tourism, on airlines, on hotels and on the business travel sector. Not every part of the industry has been as badly affected. Overland travel, including rail travel, has seen an increase and segments with strong motivation such as sport, social and cultural tourism have only been slightly affected. Reservations world wide for the month of October are estimated to be 12 – 15 % down. |
| How has Malta come through the first months of the | crisis? Are we on the road to recovery? |
| According to NSO provisional statistics overall | performance for September, show that notwithstanding mass defections in conference and group traffic, volume, when compared to 2000, is only 2.8% less. Which means that good advance bookings in the leisure sector held up well and that we can now only ponder wistfully about missing out on an excellent September. October performance, propped up by similar favourable advance bookings, should deliver quite a similar result. |
| All in all in volume terms we should end the year at | a lower level than forecast, but given the exceptional circumstances in which we find ourselves, I believe that MTA and the trade fully deserve popular recognition and acclaim for a creditable performance in 2001. |
Now a few words about prospects.
| WTO believe that the current situation is not | expected to improve over the next months but a return of consumer confidence is forecast in the course of 2002. This because of the necessity that people have to travel for business reasons, the desire to travel, and also as the need to take an occasional break is a social paradigm now deeply embedded in modern lifestyles. |
| External events can severely impact on tourism; they | can redistribute it geographically and affect its timing but they cannot bring it to a halt. The WTO forecasts that international tourism will bounce back strongly from the end of next year and grow as strongly as it did in 2000. |
| This is, of course, the general view. Islands, such | as Malta, so dependent on air travel, lose out when compared to destinations accessible overland. Likewise Muslim countries are not perceived to be safe. Malta is Christian, keeps strictly to its status of neutrality, has no known enemies and promotes the cause of peace, and therefore, when compared to North African and Middle East destinations enjoys a distinct advantage, we nevertheless have to overcome the general resistance to travel by air which has taken root even in Malta. |
| This phenomenon has made UK and German tour | operators, our main suppliers and charter operators, reduce air seat capacity drastically. Since the 11th September our battle has been to convince tour operators that Malta is a profitable proposition for them. |
| Your representatives on FATTA know and must have told | you that MTA have followed a very proactive strategy. It has tactically re-deployed available resources for publicity, promotional and support to tour operators to salvage as much as air seat capacity as possible. Although tour operators have reduced capacity down the line to every destination, Malta’s losses for winter 2001 / 2002 are comparatively moderate when compared to what other more severely effected destinations have suffered. |
| Our main objective however is to see that tour | operators maintain seat capacity as originally planned for May to October 2002, to guarantee a good summer season for Malta and Gozo. Decisions and brochure launches are just a few weeks ahead. MTA and the Committee on which FATTA is represented and which monitors the situation in Malta, and my Ministry, have put heads together to decide on the best strategy to generate consumer interest and bookings. |
| Therefore, as from Boxing Day in the UK and slightly | earlier in Germany, Malta will feature strongly in TV and media advertising. |
| Moreover at the appropriate moment Malta will be | making innovative proposals designed to capture consumer interest and kick start summer bookings as early as January to convince UK and German tour operators to retain planned capacity for summer 2002 and that Malta is truly a worthwhile destination for them. |
| It will be a hard battle and we may have some | casualties. But so long as we are able to contain air seat capacity to an acceptable level with the invaluable help and assistance of our national carrier, Air Malta, and moreover if, as WTO say, the situation is not compounded by further incidents, then Malta should enjoy a good summer. |
| In the meantime group and conference business | inquiries for the shoulder months are coming in at a very encouraging rate but what remains to be seen is whether we can beat off the competition and convert this flood of interest into confirmed bookings. |
| Your representatives on FATTA must have also kept you | informed about the progress of discussions with MTA on the level of travel agents contributions. Negotiations are a process of "give" and "take". One can never expect to win everything there is on the table. My feedback is that agreement in principle has been reached on the level of future contributions and that you are now in the process of "I" dotting and "T" crossing. Moreover an administrative formula relative to the settlement of contributions due for 2001 has also been found and agreed. |
| Finally I hope that MAITA and FATTA members will give | some thought and act upon the comments on the process of further liberalization of Malta’s travel and tourism which I made in my address to the MTA’s Annual Conference. |
| Time does not stand still. The process of | globalisation is real. As are international mergers and take-overs. Whether one likes it or not the process of liberalisation is as necessary as the process of globalisation is inevitable. They are not a matter of "if" but of "when". Unless one is ready and prepared one loses out. |
| As I look around this room I see the faces of many | who have worked hard not only for themselves but for MAITA and for the welfare and good of their fellow members. All of you here have given a contribution, whether large or small, to the general progress of our tourism industry. I thank you and wish you all success in the future. |
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