Malta exceeds WTO tourism figures

By Edward Zammit Lewis, Tourism Minister

Amid the European economic crisis concerns loomed about the future of the tourism sector and doubts reigned as to the extent that this would affect this sector and travelling in general. However, even though we have witnessed an increasing uncertainty, high market volatility and low business and consumer confidence, which were bound to affect both emerging and mature destinations, including Malta, we saw the tourism sector recovering remarkably, proving once again that tourism is a very resilient sector of the economy worldwide.

According to the latest United Nations World Tourism Organization (UNWTO) World Tourism Barometer, international tourist arrivals grew by 4.6% for the first half of 2014. Destinations worldwide received some 517 million international tourists for the first six months of this year, representing an increase of 22 million when compared to the same period last year. Europe continued to register a healthy growth rate of 5% for the same period, with Southern Mediterranean Europe performing even better at a growth rate of 7%. These results reflect improved consumer confidence in Europe and a rebound of the important traditional European source markets.

Malta’s results are even more encouraging, and the latest statistics published by the NSO show that tourist arrivals between January and September this year were up by a staggering 9% compared to the same period last year, whereas expenditure stood at almost €1.1 billion for the first eight months of the year. September figures indicate even further growth patterns over last year.

Tourism’s robust and resilient performance is expected to persist not only for the remainder of 2014, but also well beyond. This is definitely good news for Malta’s economic performance and growth prospects. These results underline tourism’s key influence on the economy that, undoubtedly, will continue to positively contribute to the excellent economic performance our economy has managed to register to date.

The latest Moody’s credit rating report confirms that Malta’s fiscal and general economic policy is moving in the right direction. The agency stated that it was forecasting real economic growth of around 2.8% for the Maltese economy in 2015. The report identified tourism as one of the two main key pillars, the other being the financial sector, and acknowledged that tourism in Malta has the potential for further growth. Moody’s recognises Malta’s attractiveness as a tourism destination and also the Government’s major and consistent initiatives and efforts to further develop this sector.

Airline connectivity and the adequacy of seat capacity is certainly an important pre-requisite for the marketing of our islands as it would be futile to attempt to stimulate demand unless this same demand can be satisfied by means of an efficient and affordable all-year-round transportation between the traveller’s point of departure and the Maltese islands. 

Air Malta has a very important role in this regard as it is a key stakeholder of the industry. This is not only because the airline carries the highest number of passengers to Malta, but also because it specifically caters for segments and source markets which are crucially important for our country, especially in the winter and lean periods.

This links with the issue of seasonality, which remains a key challenge for the sector. Even though Malta is one of the least seasonal destinations within the Mediterranean, we still face substantial gaps in the volume pattern, and we need to continue to find ways and means to stimulate more demand during the winter and off-peak months. This will result in a more efficient use of available resources and a large contribution to revenue that, in turn, will ultimately improve the sustainability of the industry in the longer term.

Tourists are placing more emphasis on destination distinctiveness and uniqueness and travellers are nowadays becoming more discerning, rightly seeking value for money. Visitors are looking for travel experiences with a difference and the issue of quality will increasingly influence travel patterns. We therefore must raise the level of quality across the entire tourism value chain and we are working to this end. In order for a tourism destination to be considered successful, it must also undergo constant re-development and re-investment, and it needs to adapt in the face of constantly changing international demands. This calls for innovation and constant product improvement.

As numbers continue to grow, we also need to efficiently manage visitor numbers and allow the market to find a sustainable equilibrium by taking into account a mix of factors including the utilisation of fixed and variable components of tourism supply such as bed stock, airline seats, restaurant covers, visitor attraction and facilities, transportation networks, general infrastructure and so on.

The renewed tourism policy, on which much work is ongoing, and which should be launched in March next year, is clearly based on these principles. It will aim at supporting and sustaining growth in a healthy, sustainable and manageable manner in order not to jeopardise the long-term prospects of the industry itself. We need to exploit growth prospects without jeopardising the long term sustainability of the industry. This warrants a careful update of the tourism policy that will guide the development of the industry for the years to come within the framework of a long term vision that goes beyond this Government’s term.

The Government is leading this process firmly and in a determined manner, working closely and collaborating fully with all stakeholders and I am more than confident that this process will prove to be a success and the start of another journey.

Dr Edward Zammit Lewis is Minister for Tourism