Labour: record tourism arrivals tempered by record costs

Labour shadow tourism minister Gavin Gulia has poured cold water over record tourism figures this year, saying the sector's costs had reached record levels.

"The value of tourism does not get calculated solely on arrivals, but also on the salaries it generated for employees and the profits for tourism operators," Gulia said in a statement in which he denounced 2011 as anything but a record year.

Between January and November 2011, 1,357,971 tourists arrived in Malta, registering an increase of 21,630 tourists over the whole of 2010 which recorded 1,336,341 tourists. The number of nights spend in Malta during the 11-month timeframe amounted to 11,192,888 which meant a 53,062 increase over 2010.

Tourist expenditure also increased by more than €60 million over the total expenditure of 2010's €1.13 billion resulting in a record total of €1.19 billion. 

"In terms of what tourists are leaving behind them, if we had to compare the first nine months to 2008, the year the international financial crisis took hold, we find that spending on salaries is 0.5% less. And although profits this year increased by 6%, when one considers that inflation increased by 7.1% over the same period, then even the increase in profit was not enough for hotel and restaurant operators to cope with their increase in costs."

Gulia also said that salaries and profits in 2011 were "just" 15% over and above the first nine months of 2004, while inflation had increased by 18% since then. "What was generated in 2011 is even less than that generated in 2004, where for every €100 that tourists spent, around €24 ended up in employees' pockets. Now it's down t €20. Employers now take €8.60 home, down from €10 in 2004."

Gulia said expenses for tourism operator had increased by 15% over 2008 and by a massive 52% over 2004, citing utility rates and food inflation. "There is no record to be proud about in 2011," Gulia said.

Parliamentary secretary Mario de Marco had not yet seen Gulia’s statement in full detail but retaliated this morning by saying Gulia may have his facts wrong.

“What I can say is that Dr Gavin Gulia needs to check his figures a bit more correctly for the simple reason that if we look at the total expenditure in tourism, it is €1.2 billion for 2011 which is an increase of €112 million over 2010 and €173 million over 2008,” de Marco said.

de Marco argued that a large proportion of this went toward other expenditures such as restaurants, excursions, museums and more.

“If I look at the MHRA report for the third quarter of 2011 and look at the Gross Operating Profit of the hotels, the GOP for all categories of hotels, from three to five stars, has increased over the last year and this, I think, is what hotels ultimately look at. That is also how we can keep on investing in human resources,” de Marco said.

Making profits is how hotels and other establishments can invest in their product and their human resources and what de Marco said he could do as a government is simply provide the framework to increase numbers but cannot dictate how profits are used by the establishments.

“This is what I can do and to be fair, the result is showing because the GOP for hotels is improving. If I look at how it was in the past, the figures are speaking for themselves with hundreds of euros difference. So, I think that, with all due respect, obviously Gulia may be quoting from incorrect figures or the wrong dimension as to what is important,” de Marco said.