Issue link: https://maltatoday.uberflip.com/i/1260749
18.06.2020 8 INTERVIEW Leisure and tourism sectors' optimistic As part of the €900 million recovery package announced last week, the government will be giving every resident in Malta aged 16 and over a €100 voucher, €80 of which can be spent on MTA licensed enterprises, such as restaurants and hotels, and €20 of which can be spent on other businesses which had been forced to close, such as clothes shops and hairdressers. Will this be sufficient to boost local demand, and are things looking up in this area? Slowly but surely, every day since busi- nesses reopened after the lockdown, consumer confidence has been rebuild- ing, as has people's confidence in terms of feeling that it is safe to go out. Last weekend proved to be the busiest since restrictions started being lifted. I obvi- ously acknowledge that it will take more than this to bring the industry back up to sustainable levels – at the moment, most businesses are starting to get by, and we're not yet at the stage where they've started being profitable again, while some haven't even started at all. e vouchers the government will give to consumers are definitely positive. ey will act as a second push to de- mand, by encouraging people to go out and use them and by boosting the value for money which consumers spend. In total, the government will be investing €34 million in the economy through the vouchers, and, when you factor in the multiplier effect in terms of what people will be spending to top up on the vouch- ers, the scheme will give a good kick, in the immediate, to the economy. Since the vouchers have to be spent by September, the aim is that in the next three months there will be an increase in economic activity which will start re- igniting the economy's engines, one by one. e next step will be welcoming tour- ists. e airport will reopen on 1 July, and at this point we should start seeing our first tourists. On 15 July, all remain- ing flight restrictions will be lifted. erefore, the process can be seen in three stages: the first was the reopening of the domestic market and the building of consumer confidence, the second was the vouchers to boost further the domes- tic market following the lockdown, and the third is the opening of our airport in two stages, after which we'll slowly start rebuilding as confidence is regained when it comes to international demand for travelling. At the same time, the country is keep- ing its eyes open from a health perspec- tive, in order to be able to tweak accord- ingly if any change in the number of COVID-19 cases is noted. In this regard, the Tourism Ministry will be introducing international protocols applying to the arrival of tourists at the airport. What kind of summer is the leisure industry expecting in terms of foreign visitors? e reopening of the airport was fore- seen, from a strategic perspective, by the Tourism Ministry and the MTA. is is why, proactively, the "Dream Malta Now, Visit Later" campaign had been launched in April - the goal was to stir people's emotions during the lockdown, so that they could use that period to in- crease their interest in Malta, and plan to visit when the time comes to start going on holiday again. In the meantime, there are incentives being devised for different airlines to re- start flying to Malta, and, hand in hand with this, an aggressive marketing cam- paign is being implemented which aims to put the island back in the strong po- sition it previously held in the tourism market. We have to keep in mind that ITB Berlin - the world's largest tourism fair - wasn't held this year. Since we have, like everyone else, lost this exposure op- portunity, a local campaign is being set up to bring visibility to our tourism mar- ket once more. e private sector is also doing their own bit by marketing their product independently. e statistics we have so far indicate that demand for flying and people going on holiday at the moment is between 20% and 30%. Obviously, the situation should improve as the virus is controlled further and more people gain the neces- sary confidence to fly. I had also explained in a previous arti- cle in BusinessToday that there is the is- sue of airline companies' retrenchment, whereby airlines are reducing their fleet, with the missing planes resulting in less linkage routes to Malta. When our air- port reopens, we won't restart with all the routes we had in 2019, when we were bringing in 2.7 million tourists a year. However, it is expected that those air- lines which are still servicing Malta will be able to deal with the levels of demand which we will initially have. And such flights will keep increasing as demand picks up. Any airline companies which notice there is demand will obviously top up its fleet to what it originally was. We must also consider our tourism supply side, that is our bed content in its capacity (including hotels, guesthouses, Airbnbs, etc.) and our leisure in all its diverse forms (including casinos, diving schools, restaurants, language schools, etc.). Since we won't immediately have the same number of tourists we had pre- viously, hotels and so on will have to wait until demand builds up. Businesses are constantly competing, and that competi- tion will result in efforts to offer a better price and service. is will be a challenge in terms of businesses keeping their cost base under control while re-positioning themselves at the forefront in the mar- ket. e reality is certain fixed costs are inevitable, and it will not be easy until demand reaches their break-even point. But the situation is very fluid, and there are both positive scenarios and others which are challenging. It all depends on how this virus is going to pan out. It could either die a natural death, or we could learn to live with it with the nec- essary controls in place, as we adapt to a new norm. In a worst-case scenario, we have to also consider the possibility that the world, including Malta, could experi- ence spikes which would require imme- diate attention. In comments to this newspaper BusinessToday spoke with Philip Fenech, chairperson for the Town-Centre Management Project in Paceville/St Julian's and a veteran in the leisure and tourism industry, on how the sector is reviving aer the COVID-19 crisis At the moment, most businesses are starting to get by, and we're not yet at the stage where they've started being profitable again, while some haven't even started at all