Tourism can still be a ‘winner’ – MHRA

Malta's tourism industry can continue to be a winner for the Maltese economy, Malta Hotels and Restaurants Association president Tony Zahra said.

Zahra said that measures need to be taken to return the hotel industry to profitability and urged the government to "increase the winter arrivals, decrease the utility rates by 4c per Kwh and reduce the VAT from 7% to 5%." He called for a re-think in the way Enemalta is run and said that the production of energy should be privatised or partially privatised.

"These initiatives will return the hotel industry to a decent profitability band the hotel industry will be able to regenerate itself to ensure a product suitable to meet the demands of the market," Zahra said.

Speaking during the association's annual conference, entitled "Winning," Zahra stressed that despite Malta's main source markets are undergoing severe stress, Malta's tourism industry can continue succeeding as it has in the last 40 years.

Calling for further investments in training of workers Zahra said that running costs emanating from bureaucracy must also decrease.

"Let us take care of the star performing industry, the tourism industry, which can make winners out of all of us in Malta," Zahra said.

Explaining that the industry now makes up 29% of Gross National Product and employment, Zahra said that "winning" is about setting specific targets which will make the sector sustainable in the long term.

He said Air Malta and hotels and restaurants are the backbone of the industry, adding that other stakeholders are vital in ensuring a a healthy and vibrant industry.

"Without any doubt the weakening of these three elements of the industry will render tourism unsustainable in the future," Zahra said.

Warning that there is no room for error and no margins for inefficiencies at Air Malta, Zahra urged the government to give the airline's management the freedom to make it "super-efficient" and return it to profitability.

While saying that the hotel industry had its best year since 2008, the MHRA president noted that the room rate has not reached the 2008 levels and "continuous spiraling costs has left the industry struggling with its profitability."   

Tourism minister Mario de Marco said that in the past years, collective efforts led to the industry weathering the storm and avoid the industry from shrinking in the light of the global economic crisis.

Saying that the tourism industry has managed to win in spite of the difficulties faced by the sector, de Marco added that Malta has achieved record above record in arrivals, guest nights and expenditure, "exceeding 2007 levels."

Armed with a plethora of statistics and a slick slides presentation, de Marco explained that in the first nine months of 2012, the industry has surpassed the expenditure and guest night levels achieved in 2007.  

In reply to Labour MP Gavin Gulia's earlier remarks, de Marco said that the tourism ministry should not be responsible for Air Malta because the ministry must speak at an arms length with all airlines, including the national airline. "Our strategy to increase accessibility to Malta has certainly paid off," the minister said.

The minister added that credit must be given to the Malta Tourism Authority (MTA) for achieving record above record in the last five years despite the difficulties created by the closure and bankruptcy of major international operators and expressed his optimism that Malta will overcome similar challenges in might face in 2013.

De Marco also explained that the industry witnessed a steady growth in the winter months following an improvement in the capacity seat factors on all airlines. He added that Malta achieved better results in shoulder months then direct competitors such as Turkey and Cyprus.

Noting that Malta has achieved positive results despite of increasing oil prices and a stagnant European economy, de Marco said: "Malta is one of the few economies in the EU to register growth, also thanks to the success of the tourism industry."

Warning against the possibility of new taxes being introduced by a new Labour government, the Nationalist minister reminded the audience that the tourism industry in Malta is among the less taxed jurisdictions in the EU.

Citing the 75% tax on the super-rich introduced by new Socialist President Francois Hollande in France, de Marco said:  "Let us be careful not to face the same situation in Malta."

An increase in routes, seat capacity seat load factor will be priority by a new Labour government, Opposition spokesperson on tourism, Gavin Gulia said.

He added that hotels forked out €19 million in 2009 and €28 million in 2010 in electricity tariffs and pledged to reduce electricity tariffs which in order to  help the industry strengthen its profitability.

Labour MP Gavin Gulia said that bureaucracy was burdening the hotel industry with unnecessary costs and added that illegal and unregulated activities are affecting the industry's profitability.

"Notwithstanding the positive results the industry has still not returned to the 2007 levels," Gulia said.

Speaking before the tourism minister, Gulia pointed out that although hotel occupancy was on the up he said that it has not yet reached the levels of 2007. He said the results achieved this year are "very good" but added that stakeholders need to work harder to achieve better results.

The MP criticised the fact that the Malta Tourism Authority was not involved in the Air Malta rebranding excersise.

Praising the work done by the tourism ministry and the Malta Tourism Authority, Gulia congratulated all stakeholders for their contribution in helping Malta achieve the destination of the year award.

However, he said: "We should not be complacent," warning that arrivals from the UK are predicted to fall in 2013 as one of the main operators, Thomas Cook will be reducing its capacity. The Labour MP urged the MTA to take all necessary steps to counter this reduction from Malta's main source market.

Gulia urged the government to improve accessibility and tackle the rising operating costs being faced by hotels. He said maintaining 2012 arrival levels will ensure that the industry delivers better results.

"We will have a better chance of winning if we all work together," Gulia said, adding that a Labour government would place both the MTA and Air Malta under the tourism ministry's responsibility.

Asked when and by how much will the utility tariffs will be reduced, Gulia said the Labour Party said the proposals will be announced when the time is right and urged the audience to trust Labour to carry out its promises after the election.