More tourists alone will not ensure profitability – Karmenu Vella

Tourism Minsiter Karmenu Vella has insisted that Malta's touristic profitability goes beyond attracting ever-greater numbers of tourists, pointing to the importance of the overall profitability of the sector as the true mark of success or failure.

In this regard, he warned that the profitability of the sector during 2012 has remained in the region of that witnessed in 2007.

Vella was speaking during the 2013 budget debate in parliament on Wednesday.

Vella said that the sector's profitability was being undermined because of added expenses. He said that while a portion of this could be attributed to what is called imported inflation, a portion of that inflation was internal and "self-inflicted".

He said that government is committed to reducing such costs, such as those stemming from energy tariffs, and that the government is also pledging to keep inflation "under absolute control."

Vella also touched upon whether the spread of Maltese tourism is being felt across the entire island, or simply being concentrated on a handful of localities, and said that the government would be looking into the issue.

Vella also spoke of the importance to improve Malta's touristic product around the island, but said that the government would be focusing its work especially on what he described as "tourism zones."

He said that action teams would be appointed with the responsibility and power to take action and make decisions in the interest of maintaining and improving their respective tourism zones.

Vella also said that the government would be looking towards improving customer satisfaction of those tourists who come  to Malta, saying that while it is important to attract more and more tourists, it is also important to ensure that once these go back to their countries, they speak well of Malta and attract more tourism themselves.

He also noted that the tourism industry generates approximately €900 million per year, but that Malta's ability to retain that wealth remains low.

"Out of those €900 million, a part of those leaves the country. There was a time when that leakage stood at around 40%. Today this has reached the 60% mark."

"It is not only important that tourists come to Malta, but also how much wealth they leave behind," he said, pointing to more added value tourism services as the way forward to ensure that Malta retains as much of that wealth as possible.

He said that despite the recent successes, he said that while some areas prospered, some others did not do as well.

Vella also emphasised Malta's dependence on seasonal limitations, insisting on the need for greater diversification of Malta's touristic product through the development of more niches such as diving tourism, medical tourism, and even educational tourism.

Vella also said that the tourism industry needs to be developed also through a greater focus on education and of tourism as a profession, which would seen as more than "a fall back option" but as a career in itself.

He also noted that the manner in which the aviation industry expanded in recent years - which dovetails with Malta's accessibility to touristic markets abroad - was organic and not adequately managed.

Vella warned that if Malta truly wants to exploit its aviation sector, it is time for an aviation strategy that envisages the elevation of the existing Aviation Department to a fully fledged Aviation Authority that is able to truly curate the growth of the sector.

"Air Malta will remain a priority for us," Vella insisted. "It is not yet out of the woods, and I must point out that it finds itself in an unhappy situation that warranted recapitalisation which came with conditions."

"It has short, medium, and long term challenges before it. But it was thanks to Air Malta that many workers developed many expertises that we were able to found an aviation and maintenance structure that led to an aviation industry."

"We believe that Air Malta is still relevant, that it can get back on the good road, and be an important functioning part of the economy. We cannot lose an economy pillar that is Air Malta."

Vella added that Air Malta must now start looking towards diversifying its destinations and its routes, saying that it needs to now look beyond European destinations.