Speech by the Hon. Michael Refalo, Minister for Tourism, at the inauguration of AMITEX 2001

I was indeed pleased to accept your invitation, Mr.Chairman, which this morning gives me the opportunity to address such a highly qualified audience. The more so now, due to the unavoidable absence of your Minister, my colleague, Professor Josef Bonnici, that I have the added pleasure and privilege to formally inaugurate AMITEX 2001.

It is my first pleasant duty, Chairman, to congratulate you, your board, all operatives and executives within the company's structure and subsidiaries, for the out turn which Air Malta, notwithstanding a difficult year 2000, has succeeded in achieving. May I thank you also for the inestimable contribution which Air Malta makes to Malta's tourist industry, for the close working relationship which has been forged between Airmalta and the Malta Tourism Authority, which in turn, through the industry's renowned and proven ripple effect, fuels and moves so many other sectors of the national economy.

I thank you, not only as Minister responsible for Tourism and on behalf of all the industry's operators, but express my gratitude also as one of the people's elected representatives, on behalf of the Maltese travelling public, which over recent years, counted in hundreds of thousands of men and women from all walks of life, who thanks to Air Malta, have enjoyed travelling to so many destinations and profited from novel experiences in the ever widening horizons of new and exciting offers which are annually placed before them.

Overseas travel has become a staple pastime for an ever increasing number of Maltese. No wonder therefore that one sees an ever growing interest among travel agents as well as among host destinations present at Amitex 2001.

Year 2000 saw 188,737 of our countrymen and women, travelling overseas mostly on Air Malta. This represents an 8% increase when compared to 1998 but more importantly a clear reflection of an improved quality of life and more disposable income presently enjoyed by the Maltese public. Your mention, this morning, of new destinations for 2001, will surely whet the appetite and attract the attention of your loyal local clientele.

It is my intention today to primarily share with you my vision for the future of Malta's travel and tourism industry. However, before doing so, I believe that it would be useful to take a brief look at the past, even if that means making reference to what I said in 1994 on the occasion of the launch of the first edition of Amitex.

On that occasion I had dwelt somewhat at length on the meaning of "success in tourism", departing from the conclusions regrettably mistakenly accepted by conventional wisdom that volume is the only benchmark, and went on to emphasise a wider appreciation of the benefits, dangers and challenges which tourism presents to a few hundred thousand people crowded in such a small land surface area such as ours.

I had then said that "tourism does not grow on trees. But it can grow and be made to grow from strength to strength on the wings of true partnerships, - between man and nature, between developer and the environment, between hotelier and agent, between supplier and customer, between the private sector and the public sector, and most certainly between the national carrier and the national tourism organisation."

I then said that NTOM (MTA's predecessor) and Air Malta had contributed much to the progress made and results achieved by Malta's tourism industry and augured the industry an even better year. In fact, 1994 set new record highs, and concluded that I believed success would be greater if "Air Malta's rapport with and understanding of NTOM became even closer".

As I concluded by saying that "Tourism must be built on the basis of reciprocal trust and partnerships" little did I know then, that that was to be albeit temporarily my valedictory address to the industry, as some days later I moved to the Ministry of Youth and the Arts, leaving my wishes for the development of "a more sincere, proactive partnership" for my successors to fulfil.

As I look back down the years and take stock of developments since then, it is with a feeling of pride that I underline the greater environmental awareness and concern about environmental issues that now runs through the industry. I note with satisfaction that tourism development policies lock into the parameters of sustainability. That nowadays most of the industry's players embrace the values of working together.

The private sector has since achieved deserved recognition and, through the Malta Tourism Authority, plays an important role in the tourism planning and policy implementation process. But most of all, as reflected through your own words this morning, Mr.Chairman, my Ministry and the Malta Tourism Authority have forged an extremely fruitful partnership with Air Malta, a true synergy of thought and effort in the interests of Malta and Malta's tourism industry.

I therefore wish to place on record what I consider is a very bold and courageous decision which the national carrier has taken solely in the national interest.

As soon as news arrived about FTI's forced decision to practically halve their already planned and contracted programme for 2001, which in essence meant that Fly FTI would proportionately withdraw aircraft from the Malta route, my colleague Minister Bonnici, Chairman and General Manager Air Malta, Chairman and Chief Executive MTA and I, met to consider and decide on a contingency strategy.

After taking stock of a situation, which was not of Malta's doing but which could have proved to be the undoing of a number of local operations, you, Mr.Chairman, committed Air Malta to retain the same air seat capacity on the Germany route as originally planned to enable other German operators interested in taking up FTI's slack, the opportunity to do so.

Yours was a decision far removed from the dictates of Air Malta's commercial interests but one dictated by the recognition that a national carrier should also play a social role nationally, and moreover, that Air Malta, as a major player in Malta's tourism scene, had been called upon to offer even greater support to the industry in that hour of need.

As forecast, our share of the German market has contracted and gauging from MIA and Air Malta's preliminary estimates for January and February arrivals from Germany, although currently contained to acceptable proportions, have registered a drop. Equally predictably, increases from the UK and French market have made up for the shortfall. The Italian market shows little change while other central and north European markets proceed very much at year 2000 levels. The North African markets, notably Libya, and eastern markets show a marked decline.

In so far as hotel occupancy goes MHRA's current survey, based on responses from establishments equal to 3000 hotel rooms, return a 2% increase for the month of January and near double that for February. March is currently 1% up over levels achieved during 2000. Naturally these are preliminary indications which still have to be confirmed by more accurate COS statistical reports.

Joint efforts by Air Malta in the UK and French markets, where increased air seat capacity is supported by additional MTA sourced publicity and marketing, has begun to deliver improved results. Feedback received both from suppliers and from the trade following Europe's major tourism Expos in Milan and Berlin, confirm the difficulties and challenges which Maltese tourism must face and overcome during 2001 while forecasting rosier prospects for 2002.

However one should not be misled to believe that "rosier prospects" for 2002 signify any substantial operational advance for the industry. Last December, when I addressed the Authority's Annual Conference I made it my mission to underscore the meaning of some basic facts. That Malta's tourism, despite increases in volume, in foreign exchange earnings and job opportunities over the last six to seven year period, is however, in terms of total annual guestnights, at a standstill. I had then used the phrase "in a rut".

The total number of annual guestnights is closely tied to and very dependent on the volume of air seat capacity floated by Air Malta and foreign airlines to Malta. Moreover, despite the encouraging gains that Malta has made in specialised niche markets, mostly serviced through small and medium sized tour operators, substantial increases in volume terms in the low and shoulder months require equal commitment to Malta by mega tour operators.

Therefore "rosier prospects" for 2002 and beyond will alone not get us out of that rut and in essence could be practically meaningless for Malta's tourism industry unless and until Malta achieves two strategic objectives.

Firstly that Malta must join the European Union. For many, many other reasons but in this context to enable Air Malta, gain access to the Third Package and achieve the flexibility to develop its great potential. Union with Europe would immediately free the national airline from the bonds of restrictive Air Service Agreements that presently shackle its operational ability, and will allow it to increase, as necessary, air seat capacity and compete, on a par with its peers, in an enlarged European Union, the source of 85% of our custom.

Secondly, the industry must strike alliances which would ensure the presence in Malta and commitment to Malta through investment in Malta of globalised and vertically integrated tour-operating, holiday retailing and hotel owning companies. That is precisely why the brief for development of the White Rocks site targeted long term rather than immediate gain. Attracting hotel franchises, and concluding management and other tie-ups with their international sales operations is one thing but actual investment in real estate attracts more binding, substantial commitments whose ripple effect spreads far beyond their actual property boundaries.

I see developments during this decade as being crucial to the development of our tourist industry. Although Malta has made great strides forward we must continue to develop quantitatively. This, in essence, means a better environment all round; a more personalised attitude and appreciation of consumer demands and expectations; a more diversified product including international standard golf courses and sport facilities, and a new approach to the management and more investment on the conservation and better presentation of our vast inventory of magnificent heritage sites and monuments.

It will be a decade during which the concept and practice of the principles of sustainability will gain further acceptance and momentum. Where we should attempt to make up for past mistakes and make certain that we do not, in the name of progress, destroy what we ourselves enjoy, those very things which visitors come to see.

It is only then that we will be able to get out of that rut. That guestnights will increase. That we will witness the real, substantial, tangible advance that Maltese operators yearn for. Adjusting to new scenarios could mean some pain for those few who remain static in their ways, a pain however which the gain for the many will far outweigh.

Today's visitor is infinitely better travelled, experienced and educated than tourists were 20 and 30 years ago. By the end of the decade people will have more time on their hands and disposable income to spend on leisure and travel. They will travel more often but for shorter periods. At the same time Malta's approach to tourism would have gone round full circle. From being a niche destination, marketing our wares as the "islands of sunshine and history" we nearly lost our identity as we moved into the insensitive seventies and early eighties to join the faceless "sun industry for the masses". Now, also because needs must, we find our way back again as we return to our roots, to all that makes us different from other competing destinations. To provide the traveller with a complete and better experience of Malta and the Maltese as we offer Malta and Gozo as the "islands of history in the sunshine".

Air Malta has played a leading, strategic role in the development of Maltese tourism. Your words today Mr.Chairman will encourage and spur tourism operators to greater effort, to more innovation, to better times. Above else they confirm to me that the bonds of the partnership of thought and action between Air Malta and Tourism which I had augured way back in 1994 are strong, resilient and a springboard for the continued advance of Malta's tourism industry.

It is my pleasure and privilege now to declare AMITEX 2001 open for business.