Horeca Q&A with PL and PN Leaders

Dr Robert Abela -
Prime Minister & Leader of the Labour Party

How would you rate the performances of the Hospitality/Tourism sectors over the summer months? Is it better or worse than forecasted/ expected? What measures and initiatives does the government have prepared for the shoulder months and beyond?

Our country and our people have experienced a challenging year due to the COVID-19 pandemic, with the tourism industry impacted the most as the movement of people across the globe was halted. Until the COVID-19 virus was studied, and vaccines distributed, the tourism industry stood still. We are now on the road to recovery as travel health regulations were issued, the fear of travelling was overcome, and our lives are steadily moving forward due to timely action taken by this government.

That said, tourism traffic to the Maltese Islands has progressively improved, week after week. Numbers are growing steadily with an overall positive performance. In relative terms to their pre-pandemic levels, passenger traffic has doubled between June and August and the average length of stay of tourists is much higher than it was pre-pandemic.

This trend shall continue in the coming months as many of the schemes announced earlier in the year will be running until the year’s end with some continuing even in 2022. Malta will also be given due exposure in a marketing campaign spearheaded by the Malta Tourism Authority. Furthermore, domestic tourism has proven to be a success particularly for hotels located in Gozo. In 2020 Malta was one of the few countries in the European Union where domestic tourism increased and is continuing to increase further this year.

There is a major concern, and not just in Malta, that the hospitality industry is not able to fill all its job vacancies. Costs are expected to rise as the cost of labour will increase and this is already being reported by some local restaurants. What measures would you propose to overcome this current situation which in some cases is even stopping hotels of operating at full capacity?

This is a worldwide concern. As a matter of fact, the hospitality industry in Malta is shifting towards operating at limited capacity since staff recruitment is an issue. The European tourism industry, not just the Maltese, is reliant on migrant workers, from outside the EU. As vaccination rates in these countries which supply such labour improve, and vaccination certificates can be read and verified by the Maltese authorities, labour supply is expected to recover, which will lead to higher salary hourly rates.

There is no easy or short-term solution to this. The truth is that contrary to other countries, many sectors in Malta continued to progress and increase their demand for labour throughout the pandemic. The manufacturing sector, the information technology sector and online gaming, have continued to employ thousands more and possibly even attracted people who previously worked in the hospitality sector.

The government, in cooperation with other stakeholders, is pushing the idea that a career in hospitality can offer great prospects. We will continue to invest in training facilities for the sector and maintain an employment regime that is conducive to supporting high employment rates. As for imported labour, we are working to streamline the process to employ foreign workers. We will, however, be focusing more on quality as it is crucial to ensure that industry standards are adhered to through a Skills Card Certification. This includes training, such as knowledge of the Maltese Islands and good communication skills, before being permitted to work.

Where do you see the long-term path for our tourism industry? Continued increases in volume may not be sustainable. Some may say that in 2019 we were already suffering the strains of over tourism, at least in some months.

Volumes are needed to guarantee air connectivity, different air routes as well as flight frequencies. Volumes are also needed to keep the operation of tourism investments, like hotels and other accommodation establishments, catering establishments, museums, and other venues both feasible and profitable. They are required to keep multiple direct and indirect service providers to the industry in employment all year round. They are crucial for the retail sector, particularly in main tourism zones.

The country is still far from reaching 2019 levels once again. In the long term, Malta will need to balance volume with higher yield per tourist. Malta must aim to offer higher value and improved experiences for our visitors whilst implementing the diversification strategy to spread tourism across the islands and throughout the year. Malta will need to concentrate on developing the markets, niches and segments that meet these criteria. The data so far indicates that we may already be reaping some results from our new strategy. The average length of stay of tourists who visited Malta this year is much longer than in previous years. In 2019, the average length of stay of tourists was 6.8 nights. Today, it is 10.3 nights which translates to about one and a half times longer. If we look at spending, we see that per capita, expenditure now stands at €946, as against €737 pre-pandemic.

Were these trends to continue, even with 20% less tourists than 2019, we would get the same tourism revenue as we had before the pandemic.

With all the airlines that were operating to Malta and are again returning after the pandemic, do you still see a role for AirMalta?

Malta’s national airline has and shall continue to have a crucial role for the islands, a role that goes beyond tourism. The national airline is the carrier of the Malta brand, with loyalty to the destination. Many airlines are presently flying to Malta because it is profitable for them to do so.

If the Malta route would be less profitable than other destinations, they have no loyalty to the destination, and they will choose to do what is best for their company’s bottom line. A national airline is also very important for meetings, incentives and business travel, as well as cargo transportation. Low cost airlines do not offer such services.

Our economy is heavily reliant on tourism as it is a major earner with a strong multiplier effect. Do you see any risks of being so reliant on an industry that has proven to be so sensitive to external world events, whether it is the weather, political conflicts, or a pandemic?

No economy should be overly reliant on any one industry. Over the years our islands’ industry mix changed and evolved. Some industries have vanished, and this happened due to different reasons including lower costs of operation elsewhere, new technologies and changing trends. New industries developed, grew, and took over. Industries such as gaming and finance to mention a few, can be affected by many factors.

The new regulations could adversely impact their contribution to Malta’s GDP. Despite all of tourism’s sensitivity to external world events, it has proven to be the one reliant, enduring and important contributor to the Maltese Islands’ economy, with a high propensity to recover quickly from setbacks, enjoying a strong multiplier effect as well as being an industry that injects income very quickly in people’s pockets.

The Maltese Government is committed to ensuring that tourism remains one of the key pillars of our economy. In coming years, we want the sector to evolve in line with the rest of our economy, adopting digital technologies more rapidly and reducing its environmental impact through better recycling of waste, less use of polluting transport means and a move towards more energy-efficient and renewable energy.