Go Back

Concluding Address by the Minister for Tourism, Dr. Michael A. Refalo at the Malta Tourism Authority Annual Conference – ST JULIANS - Thursday 22nd November 2001

pr1756

22/11/2001

Once more it is my pleasant duty and privilege to conclude the Malta	Tourism Authority Annual Conference.
I thank you, Dr. Grech, Chief Executive, all members	of Boards and Directorates, MTA staff locally and overseas, a word of thanks and appreciation to former Chief Executive Alfred Cassar Reynaud, who guided and directed NTOM and subsequently MTA till April this year, for your contribution to MTA’s creditable performance despite difficult circumstances.
My thanks also go to all of you here present who	attended this Conference and took part in the excellent workshop discussions which have helped to further flesh out Malta’s strategic response to the challenges and opportunities which face our tourism industry.
As some may recall, this time last year, in the final	part of my address to this conference, I said that it was "my mission to apply a strong dose of realism to the national debate on tourism’s future." I had then placed before you the challenges, the targets and exciting prospects which lay ahead.

My words were not lost on MTA.

During 2001 the Authority proceeded as planned. It	has expanded its role, its range of focus and operational capabilities, and meanwhile brought minds together to fashion a response and find appropriate solutions to overcome the challenges ahead, to meet set targets, to capitalize upon and grasp each and every opportunity that presents itself.
In Dr. Grech’s words, today’s proceedings take us	a further stage in "the dynamic process of consultation, direction and coordination." A process which matches and reflects our industry’s development and changing profile, that follows its fortunes and failings world wide.
Our ability and preparedness to adjust and adapt to	new scenarios, and to rally and react to events and circumstances, foreseen and otherwise, are therefore paramount.
One may perhaps wonder why in this conference’s	working papers MTA makes no mention of EU accession. It is not an omission on MTA’s part but rather the recognition by the Authority that the EU promotes a more consumer oriented industry, one that provides a better service, that embraces and upholds the principles of sustainable development, that therefore has high regard to environmental issues, concerns and protection.
MTA’s strategies and your discussions during the	workshops centered precisely on these themes. For whether Malta joins the EU or otherwise, the fact remains that it is in the interest of Malta’s tourism’s industry to move in the direction mapped out by the EU. It would be folly for anyone involved in tourism to by pass this golden opportunity.
That accession implies the availability of more	funding to help cure our ills and further enhance our strong points, is an added bonus.

REVIEW OF 2001

I said last year that 2000 had not been an easy year	to manage and that the industry should be more than pleased to have consolidated the gains made in 1999. I had then predicted that 2001 would be more difficult.
The signs were there for all to see. Primarily they	consisted in the 50% reduction of the Frosch (FTI) programme to Malta which meant the loss of an estimated 60,000 visitors from Germany, following that company’s take-over by Airtours, as well as its subsequent restructuring and shedding of unprofitable routes and air seat capacity.
Secondly the lifting of sanctions from Libya, welcome	though they are internationally, but damaging from the Malta tourism perspective.
We forecast then not only a loss of 10,000 visitors	from Libya but also an additional consequential loss of business and other traffic which came through Malta and then traveled onwards to Libya by sea.
Soon after we had the collapse of a Dutch airline	which severely limited air seat capacity from the Benelux, which, conservatively speaking, meant a further loss of more thousands from what was then a fast expanding Dutch and Belgian market. All in all a downturn of around 80,000. To balance out this expected deficit MTA planned to further strengthen arrivals from other core and secondary markets and penetrate new and developing ones.
Results to August show that things were proceeding	very much as planned until the 11th September, an unforgettable tragedy which shall remain a black day in the calendar and history of international tourism. Therefore, to correctly assess and evaluate tourism’s performance for 2001 the year should be seen in two segments: the first eight months, till August, and from September to the end of the year.
NSO tourism statistics for the first eight months	show that an 8000+decline in volume terms was more than amply compensated by a 900,000 increase in the number of nights that visitors spent in Malta. This alone extended the length of visitor stay from just over 8 days in 2000 to close to 9 ½ days in 2001. Total earnings were practically on a par, and in the same period, the hotel and restaurant labour force increased by 140.
Statistics also show that the projected growth in	core, secondary and other markets practically made up for predicted shortfall and, when compared to 2000, growth had whittled the difference down to slightly below 1%. As the World Tourism Organisation estimate average for Mediterranean destinations was minus 2%, I believe that MTA and the trade deserve the country’s congratulations for a job well done.
2001: A YEAR OF HARD DECISIONS - 2001 has also been a	year for hard decisions.

PHASING OUT TOSS

I have already explained, many times over, the	reasons why, that also with the industry’s support, we proceeded to phase out the Tour Operator Support Scheme. As from this month the exchange rate subsidy has been discontinued.
This has meant the availability of more funding which	has gone towards increased advertising, promotion, publicity and exposure for Malta, direct support to UK, Irish and, now also, to tour operators in other markets.
No amount of sabre rattling and pressure such as that	exercised last week by one particular mega tour operator during London’s WTM, no amount of partisan criticism, will make us go back on this decision.
Enough said when I tell you that one market where	despite the 11th September aftermath, results remained practically as planned, at least up to this month, and without any exchange rate subsidy to prop it, was the UK market. Which means that advance UK bookings to Malta were generated by increased publicity and by the innovative arrangements reached with UK tour operators as part of the TOSS phase out process.
We knew that the decision to phase out TOSS would not	please some UK tour operators who only saw in the system a source of extra income for them rather than a scheme to make holiday packages to Malta more price competitive.

CONTROLLING HOTEL DEVELOPMENT

We also knew that the strategic decision taken to	control bed stock growth would ruffle feathers and find some opposition in certain quarters. It was yet another hard decision to take.
It was however a natural and necessary decision	adopted in the national interest and in the interest of the well ordered, well managed, environmentally friendly tourism industry we wish to develop. A decision which stems as the obvious conclusion following the findings of the Carrying Capacity Assessment study initiated to explore and establish the highest level and limit for tourism planning and development. Findings, which in turn led to the choice of a policy based on the tenets of sustainability.
This policy was framed following an extensive round	of consultations, a presentation to which all interested were invited to participate, and bilateral discussions between the Ministry and MTA which subsequently led to deliberations in Cabinet and to the policy’s subsequent endorsement by Government.
Before the end of the year we will launch the full	Carrying Capacity Assessment report which will be accessible to all tourism planners and operators. The new development policy will be administered by the Malta Tourism Authority through its Product Planning and Development Directorate.
MTA TO ASSUME RESPONSIBILITY FOR POLICY	ADMINISTRATION
Furthermore the MTA will, as from the 1st	January 2002, assume responsibility for the administration of policies relating to other areas previously under HCEB’s wing. 2002 will also see the bringing into effect of all but a few of the provisions of the Travel and Tourism Services Act, including those relating to appeals from decisions taken by the MTA Board and / or Directorates. This is what was promised in 2000 and this is what we are delivering.

ENFORCEMENT MEASURES TO ACHIEVE COMPLIANCE.

Moreover I believe that I have your support that we	must instill a stronger sense of discipline and compliance to regulations by the trade.
We cannot tolerate unlicensed properties, be they	apartments, catering outlets or any other type of establishment, trading in competition with regular businesses who pay all their dues and taxes.
Nor can we tolerate and accept the excesses of owners	of some catering outlets who persist in flouting waste collection regulations and are themselves the cause of many environmental problems in our main tourist areas.
For the last months the Tourism Department has been	assisting those owners who requested help to ensure that applications with the various departments and bodies involved are processed without delay. In many cases however bureaucracy is not at fault.
Moreover the HCEB has reminded owners of all catering	establishments and hotels to ensure that they do not make use of the domestic waste collection service or place waste in skips. Therefore, as form January 2002, business outlets not in possession of a regular trading license will not be allowed to operate. Moreover business outlets which do not produce a bona fide binding agreement with an authorised swill collector will also not be allowed to operate.
We will use all possible means to ensure enforcement	and compliance. I will now move from the nitty gritty of our local scene to wider horizons.

MALTA IN LINE WITH WTO’s NINE POINT PLAN

Those of you who follow developments in the industry’s	global dimension know of World Tourism Organisation nine point plan for the development of international tourism launched at the recent WTO General Assembly.
I am sure that you will also be equally pleased to	learn that Malta is not only in line with international developments but is, in many instances, a step or two ahead of the field in the organization and administration of our tourism industry.

WTO calls

for a better understanding of the economic importance of tourism through the building of Tourism Satellite Accounts. Malta is in the process of compiling the second edition to follow the TSA published in 2000.
for less congestion of sites and infrastructure resulting from the continuous increase of tourist flows. Volume can as easily be a sign of success as of failure. Malta has therefore adopted a controlled development growth scenario in line with national requirements which converge with the WTO policy and advice.
for more liberalisation of trade in services while respecting the principles of sustainable development. Malta has, throughout the years, progressively liberalized trade in services and opened its doors to overseas investment. We will liberalise further and I would therefore advise those who blindly cling to agency and other agreements, as if their principals’ decisions were immutably perennial, to proactively work towards tying up more lasting arrangements which reflect the mood and mode of the times.
for the need to better control the cultural and social impacts of tourism development. Here again I refer you to the new development policies.
for appraising tourism’s contribution to understanding among nations and to the promotion of a culture of peace. Malta’s espousal of the status of neutrality and the cause of peace, that it is considered as a friendly and safe country, has contributed greatly towards achieving the successful development and expansion of our tourism industry.

for the introduction of new information and communication technologies. Here again, through MTA, especially now, following the international launch of the Authority’s website, Malta’s tourism finds itself very much in line, if not ahead of the competition, and provides consumers with tremendous freedom and direct access to a wealth of information and a plethora of services. The trade, mainly hoteliers, has not been slow to adapt and grasp the advantages and opportunities of the information age.
for the recognition of tourism as a means of job creation and the reduction of poverty. When close to 30% of gainfully occupied are directly or indirectly employed as a result of our tourism clearly underlines the recognition that Malta gives to tourism.
for a further increase in the process of decentralisation of responsibilities and the efficient management of destinations. The fact alone that following the enactment of the Travel and Tourism Services Act, Government has put faith and entrusted the private sector to administer policies, ensure the orderly organization of the industry and promote Malta overseas, is ample evidence of government’s endorsement of this policy.
for a balanced partnership between the public and private sectors. MTA’s actual composition, added to yesterday’s budget announcement of specific public private partnership schemes for the enhancement of the tourism infrastructure again show that Malta has already reached the stage targeted by WTO’s Secretary General for the leisure industry world wide.

BUDGET MEASURES IN FAVOUR OF TOURISM

Mention of the budget brings to mind that apart from the various Public / Private Partnership embellishment projects, Budget 2002 provides the industry with a number of specific incentives.

These include:

a lower rate of interest for bank loans for refurbishment,
a subsidy on the price of diesel oil and kerosene,
confirmation that VAT on accommodation will definitely remain unchanged for a further 18 months,

tax rebates less bureaucracy and concessions for service sector SMEs,
customs duty reductions,
a more advantageous system for depreciation calculation purposes,
tax deductions relating to pre-trading expenses such as staff training, and, last but not least,
an undisclosed but agreed amount to provide tourism, through the Ministry and MTA, additional capital in support of strategies made necessary because of the 11^th September attack which has had such a negative impact on our tourism industry.

11^TH SEPTEMBER AND ITS AFTERMATH

Following the tragedy which cost thousands of lives	in the US and now in Afghanistan, a Committee made up of MTA, Air Malta, MHRA and FATTA was set up to closely monitor the situation. All parties file regular reports to MTA which, in turn, compiles and issues bulletins to all participants.
On the 2nd October I invited the social	partners for a fruitful and useful open discussion with the Committee and other trade associations.
In the meantime Cabinet was regularly briefed and	informed of the impact on tourism as the situation evolved. Following further briefings and more in depth discussions at Ministry level, meetings at which MTA, Air Malta participated were held with my colleague ministers, John Dalli and Josef Bonnici, and myself. At these meetings we proposed a flexible, tactical strategy to overcome the challenges which the situation called for. Finance undertook to underwrite the cost and provide the required financial cushion.

TOWARDS RECOVERY

It is only now that a firmer pattern seems to be	emerging and that the war against the protectors of the warped mind behind the terrorist attack has taken a definite turn. There is still however strong resistance to air travel and the fear of flying factor is the greatest problem which the leisure and airline industries face. The renewed violence in the Middle East further heightens an already difficult situation. At WTM the UK trade’s reaction to the pro-active measures taken by MTA to adjust winter programmes and benchmarks to the post 11th September scenario was very positive.
An early booking position may see us through to the	end of the year and compared to other holiday destinations, Malta has apparently suffered less air seat capacity loss. The main challenge of course refers to our all important summer season.
Government has provided MTA with sufficient funds to	intensify publicity and advertising. Consumers’ reluctance to decide must be overcome. Malta must be there, to occupy consumers’ attention and translate this attention into firm bookings.
It is of the essence that we generate and source	summer bookings in early January, in time to prove to UK tour operators that Malta and Gozo are destinations of choice, destinations which give them a good return, and therefore make the floating and retention of air seat capacity to Malta a worthwhile investment.
I am sure that you would agree with me that the same	applies to the German market, our second largest source of visitors, where we need to kick start and maintain a substantial recovery.
Naturally other markets are also important and I rely	on MTA and the trade, through direct contacts, to ensure that the progress achieved during the first eight months of the year will be consolidated and improved upon.
I cannot end my address to you without specific	mention and thanks to Air Malta. My Ministry, and as you heard this morning, MTA, are very appreciative of the important role played by our national airline. Were it not for the great support which Air Malta gives to MTA and to Malta’s tourism industry, we would not be here to talk so enthusiastically and optimistically about recovery.
Although the World Tourism Organisation forecasts a	revival in tourism by early 2003, I am convinced and confident that with the energies and expertise of all in this hall, as well as out there among tourism’s big family, Malta and Gozo will recover and prosper again well before that time.
I thank you all for making this conference a most	fruitful and useful experience for everybody.

Share this Press Release

Other Press Releases:

PR261926

STQARRIJA MILL-UFFIĊĊJU TAL-PRIM MINISTRU “Sodisfatt bil-qbil bejn il-mexx...

PR261925EN

PRESS RELEASE BY THE MINISTRY FOR EUROPEAN FUNDS, SOCIAL DIALOGUE AND CONSU...

More Press Releases