Last week the MHRA in collaboration with Deloitte and Touche presented the first quarter results for 2009 concerning the tourism industry. JULIAN ZARB reflects on these statistics and compares them to the Global trends published by IPK Consultants during the recent ITB Fair in Berlin; and asks: “Is this the end of Tourism as we know it?”
Last week the Malta Hotels and Restaurants Association (MHRA) together with Deloitte published the tourism industry’s last quarter results for 2008 for Malta and Gozo. While this may have shown a decline on the 2007 figures, one must ask: Did we expect any better, given the international scenario? During the ITB Fair in Berlin, one of the presentations given was prepared by IPK International and included the World Travel Trends for 2008, there was a clear slowdown in the percentage growth of outbound travel during last year over that registered in 2007, from 6 per cent to 2 per cent growth. Of all the continents, Europe showed the lowest growth of arrivals (1 per cent) compared to Africa (5 per cent) and the Americas (4 per cent).
So how did we fare in Malta and Gozo? The Deloitte report shows that between 2008 and 2007 there was a drop in five star accommodation occupancy compared to the four star and three star categories; despite this drop in accommodation demand, the rates for five star hotels was actually higher than it was in 2007 and this shows that we may now be experiencing a new breed of traveller and tourist and we have to prepare now for the needs and perceptions for tomorrow’s industry.
The IPK report gives a rather gloomy outlook for 2009, and many IATA flights were cut from -4.6 per cent in December 2008 to -5.6 per cent in January 2009. On the other hand, Malta and Gozo (possibly because of our small size and modest tourism arrivals), may have been spared this first stage in global economic disaster. There is a trend, at least at the moment, for domestic and short haul holidays and travel and again, Malta and Gozo may yet have a good opportunity to offer a unique destination at the periphery of Europe, where we know that there are some 500 million consumers who could, potentially, pose the basis for a ready market for these islands. And with a mere intake expectancy of between 1.2 and 1.3 million visitors per annum, that certainly is a tempting offer.
This recession which, we are told, is expected to outpace the great depression of the 1920s (after all this has a greater economic knock-on affect than that event did at the time) should last between six to eighteen months and there will be changes once this happens, some 40 per cent of Europeans are expected to change their travel behaviour. To begin with, the concept of value for money will take a whole new meaning as people realise that the euro, dollar, sterling or yen or whatever currency they use, will have been more difficult to come by and they will expect more products and services for each unit. There will be a growth in domestic travel and internet will feature more in the planning of these travel itineraries whilst web meeting technology will become a new means of communication for the modern business traveller.
In conclusion, therefore, when we look at the figures presented by Deloitte and IPK for 2008, we should not be so surprised, but we need to study their significance in the light of the potential offered by this opportunity to rethink our marketing strategy and policy.