MTA campaigns in Italy ‘led to positive results’ – Auditor General

In the Performance Audit Report: Advertising Malta as a Tourist Destination - A case study of the Italian Market, the Auditor General reported that the advertising campaigns carried out in Italy by the Malta Tourism Authority (MTA) during the period 2008 to 2011 generally led to positive results. 

The report said that advertising and promotion campaigns undertaken in this market generally effectively addressed its dynamics. 

"Nevertheless, a minor decline in tourist arrivals from Italy materialized during 2011.  Moreover, the opportunity exists to continue to address Malta's low season potential and niches markets to further enhance the Authority's performance," the report said.

The National Audit Office (NAO) said that the MTA budgetary allocation for advertising was significantly increased to counter the economic downturn experienced in Italy, as well as unforeseeable international events, in recent years and to support the introduction of new routes from Italy. 

It pointed out that the intensifying of advertising campaigns resulted in higher costs per Italian tourist visiting Malta. 

The Auditor General added: "The MTA sought to promote Malta as a destination offering a wide range of leisure activities through generic advertising.  Through this approach, the Authority sought to capitalise on the tourism niches in which Malta is considered to have a competitive advantage over other destinations.  However, generic and all segment advertising do not fully take into account specific niche areas to attract more specialized tourism."  

The report explained that in recent years, the authority succeeded in maximising capacity during the peak season.  Simultaneously, the MTA increasingly intensified its advertising to attract more Italian tourists during the low season. 

However, the report noted that despite the generally positive results of this strategy, the opportunity exists to further address Malta's low season potential.

The implementation of advertising campaigns in Italy was generally within budget and enabled the attainment of the most critical predetermined performance targets.

NAO also pointed out that advertising services procured through direct orders were always within MTA's authorised procurement level, but audit trails were weakened as the authority did not fully document the relative decision-making processes in the services procured through direct orders, or when financial support was awarded to operators through the Tour Operator Support Scheme.  

In the latter case, NAO pointed out that MTA lacks documented operational guidelines regarding the disbursement of such financial support.  Moreover, due to technical and financial reasons, substantial delays materialised in the engagement of an advertising  agency to assist the MTA in its marketing activities. 

NAO said: "Such circumstances may potentially compromise the quality and timeliness of advertising content and material in future campaigns."

Moreover, the report highlighted that MTA's analysis of its advertising campaigns is generally limited to a macro review since cost effectiveness issues did not enable the evaluation of specific campaigns.  Consequently, the outcome of advertising is generally assessed against various tourism performance indicators, which provide an assessment on a general level. 

This audit acknowledged that the MTA's efforts and initiatives to attract tourism from Italy have led to significant progress in arrival rates and earnings. 

However, the opportunity exists to address the areas of concern highlighted in this audit to further ascertain the industry's sustainability, and the report proposed a number of recommendations.

The recommendations intend to address the strategic, operational and governance concerns highlighted by the audit. Among its recommendations, the NAO proposed that promotional campaigns should extend initiatives to promote Malta's tourism niches and further promote low season tourism.

It also encouraged MYA scientifically test the advertising content prior to publishing it and accelerate the process in choosing advertising agencies to avoid risk of publishing outdated material.

The General Auditor urged MTA to strengthen its corporate governance related to the procurement of services by direct order by having more robust audit trails.