Tourism turnaround by Q2 2004 – Zammit Dimech

- Lm50 million capital investment in tourism last year

Speaking at the Malta Hotels and Restaurants Association’s annual gala dinner Friday, Tourism Minister Francis Zammit Dimech said that if the positive economic situation in the EU countries, the US and Japan prevails, tourism in Malta is due to pick up in the second quarter of this year.
He also revealed that last year Malta’s important tourism industry witnessed a one per cent loss in tourist arrivals, following other negative results over the two previous years.
But, according to Dr Zammit Dimech, there was a silver lining to the dark clouds gathered over the industry for this third year running.
Looking at figures for the first ten months of the year he stressed that last year, despite the drop in overall tourists visiting Malta there was nevertheless an increase of 7.1 per cent in the number of nights tourists spent in Malta with a total of 9,994,482.
Importantly, expenditure by tourists rose by Lm16.4 million to Lm396.2 million, an increase of 4.3 per cent, while per capita expenditure increased to Lm177.7 from Lm174.6 – an increase of Lm3.1, or 1.8 per cent.
According to Zammit Dimech’s mostly upbeat message, the good news is that there was a 7.1 per cent increase in nights spent in Malta. But, on the flip side, the bad news for the hotels is that there was the drop of 2.3 per cent in tourists staying in hotels, with 6.1 per cent of tourists opting for non-hotel accommodation.
On the prospects for this year, Zammit Dimech commented that Malta’s tourism sector partly depends on what happens in the economies of the countries of origin of the tourists that visit Malta - the United Kingdom, Germany, Italy and France.
He said that, with the exception of the United Kingdom, the economies of these countries were suffering and that this economic slowdown affected the number of tourist arrivals, especially from Germany. Whereas in the first eleven months of last year tourist arrivals from the UK increased by 16,337 to reach 437,366, arrivals from Germany decreased by 16,634 or 12.1 per cent, arrivals from Italy decreased by 8,331 or 8.7 per cent and arrivals from France decreased by 2,917 or 3.8 per cent.
He comments, "Our tourism sector is intrinsically dependant on what happens in the European countries as over 90 per cent of all tourist arrivals come from European countries. Figures released in this year’s Budget speech indicate moderate growths in the economies of the major European countries.
"The German economy is forecasted to grow by 1.5 per cent against a zero growth in 2003, the French economy should grow by two per cent against a growth of 0.5 per cent last year, while the Italian economy is due to grow by 1.7 per cent against a growth of 0.4 per cent last year.
"It is interesting to note that the economy of our main core market – the UK economy – should increase by 2.4 per cent in 2004 against a growth of 1.7 per cent in 2003."
Zammit Dimech expressed his gratitude to the many tourism entrepreneurs who during the past year continued to show their faith in the sector by investing heavily in tourism-related projects.
He explained how last year there were 17 projects under construction, involving an investment of over Lm50 million in new hotel accommodation, extensions and re-development.
Apart from these projects work was at an advanced stage on three major tourism projects: the Cottonera project, the Manoel Island and Tigne Point project and the Cruise Liner Passenger Terminal. These three projects involve an investment of Lm170 million.
He added that on its part, the government is doing its utmost to embellish our country. He said that over the past years, millions of liri were invested on the embellishment of promenades, roundabouts and centre-strips, on rehabilitation and restoration projects and on infrastructural projects, including road building and maintenance; and the construction of the Cirkewwa and Mgarr terminals.
In this year’s Budget, government announced that it will be providing Lm10 million over a four year period, earmarked for embellishment projects which will enhance Malta’s attractions. He said that recurrent and capital expenditure in tourism will now be managed through an ‘ad hoc’ account, which will be credited with VAT receipts from hotels and restaurants.
Recalling landmark moments of the year for Malta’s tourism industry, he cited two positive announcements in the latter part of the year:
One being that, "Dietmar Gunz, together with other shareholders, re-purchased the FTI shareholding from Airtours plc. Gunz, who always believed in Malta’s potential as a tourist destination, is optimistic that sales to Malta from Germany and Austria can again increase in the future. With this firm conviction, the Malta programme for Summer 2004 has been enhanced and the seat capacities to Malta have been increased. Last December, Frosh Touristik launched its summer 2004 brochures to 770 travel agents from Germany and Austria in Malta. FTI have informed me this morning, that their winter sales for Malta have in fact improved.
"Wolfgang Beeser was last month re-appointed Chairman of the Management Board of Thomas Cook. Wolfgang Beeser, who is viewed by many in the tourism industry as one of the few people who can turn Thomas Cook around, is a ‘friend’ of Malta."
Zammit Dimech is confident that 2004 offers Malta an opportunity for long-term growth from the Nordic market, with increases envisaged from Sweden, Norway, Finland and Denmark.
Looking forward to EU membership, Zammit Dimech stressed that membership will change Malta’s economic environment through increased mobility and trade liberalisation with other members of the EU.
"The EU will open up for our islands an internal market of 450 million people. Membership will also offer new challenges to our national airline, Air Malta, which is a key player in the development of our tourism sector. Following 1 May, Air Malta will be in a position to embark and disembark passengers in airports on its way to scheduled destinations, thus making better utility of its seating capacity. He said that Air Malta already announced that as from 2 May, it would be operating non-frill flights from Malta to London and from Sicily to London. In the meantime, Snowflake, a low cost airline, has already shown interest in Malta and is scheduled to operate from Stockholm and Copenhagen."
He adds that, "Even if the past three years represented a difficult time for us all, these were not wasted. In the past three years, we re-wrote our strategic objectives involving all stakeholders in the decision making and Malta is now being marketed as an experience where a number of niche markets were targeted to overcome seasonality problems."