Issue link: https://maltatoday.uberflip.com/i/1473180
8 NEWS 14.7.2022 T hanks to a unique combination of a mild climate, exceptional natural resources including small sandy beaches, a rich history, culture and heritage, and its proximity to major tour- ist markets, the Maltese islands located in the middle of the Mediterranean Sea hope to join the list of leading tourism destinations in terms of both internation- al and domestic tourism. e Mediterranean has a long tra- dition of trade, travel and cultural exchange. Over time, Mediterranean destinations have developed a unique tourism offer, with the traditional sun and sea being complemented by con- ference business, diving and culture as well as cruise and meetings tourism. Supported by a well-developed infra- structure with excellent connectivity by air and surface transport, Malta of- fers a rich and diverse set of tourism products, services and experiences. A high tourist density was recorded in the smaller countries with Andor- ra, Monaco, Malta, Cyprus, Croatia, San Marino, Montenegro; all reporting over 220 arrivals per 100 of population. Visitor expenditure in destinations on accommodation, food and drink, local transport, entertainment and shopping is an important pillar of the economies of nearly all Mediterranean destina- tions, creating much-needed employ- ment and opportunities for develop- ment. According to the UNWTO Tour- ism Towards 2030 long-term outlook, global international tourist arrivals (overnight visitors) are set to contin- ue experiencing sustained growth, and are expected to hit 1.8 billion in 2030. International tourist arrivals in the Mediterranean are expected to in- crease from 300 million in 2010 to over 500 million in 2030. Surreptitiously, the Covid pandemic hitting the globe in March 2020, has temporary put a stop on all predictions of growth for the industry. Following two years of lockdowns, curfews and social distancing many Europeans now feel that they have been living in a gilded cage. As soon as easing of trav- el restrictions was announced, many packed their bags and booked a holi- day to their favourite Mediterranean destination. Such travellers were warmly wel- comed in Malta, with the country hop- ing to catch up to the numbers reached in 2019. Hot on the heels of the revival of the market, was a smart initiative by tourism minister Clayton Bartolo who launched a sustainable future strategy for the tourist market. As can be ex- pected, the strategy is based on three pillars: helping the industry continue to recover from the COVID-19 pan- demic, rethinking previous growth models and revitalising the sector by cornering new niches. Naturally, the quest to attract a more affluent type of visitor is closely linked with the island's ability to further de- velop its product. An effective fiscal measure to attract visitors from un- tapped destinations is the policy by MTA to continue to sponsor landing fees of low-cost airlines. Another drive is to discover new ways how to main- tain tourism's share of the GDP and ensure it remains a stable economic pillar. Figures show how during 2019, the sector yielded a gross return of €2.2 billion. e new strategy also highlights that imbalances in the accommodation sec- tor must be addressed through more selective development policy. is year, the authorities are hoping that with a lull in Covid infections the best we can achieve is 1.9 million visitors. is is encouraging, as most predict that it takes two years to recapture the numbers achieved in the stellar year of 2019. Sadly, there has been a recent rise in COVID-19 cases and the Omicron variants are set to disrupt the recovery and affect consumer confidence. Some countries reintroduced trav- el bans and restrictions for travellers originating from risky markets. At the same time, the vaccination roll-out remains uneven and because of this, many destinations still have their bor- ders completely closed, mostly in Asia and the Pacific. A challenging economic environ- ment could put additional pressure on the effective recovery of international tourism, alongside with the surge in oil prices, increase in inflation, potential rise in interest rates, and the contin- ued disruption in supply chains. How- ever, the ongoing tourism recovery in many markets, mostly in Europe cou- pled with the widespread vaccination rollout and a major coordinated lift- ing of travel restrictions, could help to restore consumer confidence and accelerate the recovery of international tourism. What are the economic factors that have a bearing on the spending pow- er of those seeking a vacation outside their country? Obviously, a healthy la- bour market in most European states helps, together with the high pent-up feeling to travel. After all, money was saved during the two years of pandem- ic when overseas holidays were given a miss. Deprived of holidays for years, va- cationers are "revenge travelling", de- pleting what remains of their pandem- ic-era stimulus cheques. e relative weakness of the euro currency has made travel cheaper for visitors from Asia and USA. One of the causes for the drop in value for Euro is weakness in confidence level index. Another chronic problem is the shortage of workers across the entire hospitality sector. One may question - where did all the workers go? In Mal- ta, we were continuously reminded by Malta Enterprise that the generous fur- lough scheme saved over 100,000 jobs (almost 50% of non-state workers). e situation is an enigma. Prior to the onset of the pandemic, low-earning jobs were easily filled but with the on- set of Covid-19 this forced workers to leave in droves - starting March 2020. Not only hotels and restaurants are grumbling even other sectors in manu- facturing, construction, legal and audit are frantically interviewing foreigners. Another headache this season is can- celled flights at airports. Reaching your favourite destination is also marred by strikes at most busy airports with de- lays and non-arrival of luggage. Going on a relaxing holiday has never seemed so stressful. Staff shortages at airports and airlines have prompted a surge in flight cancellations. Critics argue that such stress should have been avoid- ed in most European airports stating they should have been prepared. Still aviation bosses have complained for months about the difficulty of hiring staff. In Malta, Castille boasts of a buoyant economy with low unemployment at 3.6%, which is at its lowest for a dec- ade. Still, as stated earlier, most places have run out of staff. Whatever cau- tion we might have felt to let in more non-eu migrants, this has now been set aside. Malta is now employing near- ly everyone within its borders who is willing and able to work. Obviously the scarcity of workers is putting pressure on wages to rise. is pressure is also felt in the hospitali- ty sector where hourly rates paid for casual staff is rising not only due to supply and demand but because of the effect of inflation. ese challenges are tough for the tourism minister but one hopes no ef- fort is spared to continue to upgrade resort facilities and plan for better quality visitors. Reflections on factors hitting tourism George Mangion George Mangion is a senior partner at PKF, an audit and consultancy firm, and has over 25 years' experience in accounting, taxation, financial and consultancy services. His efforts have made PKF instrumental in establishing many companies in Malta and established PKF as a leading professional financial service provider on the Island