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Network News • 09-08-2022

Attracting visitors to an exciting race with dinosaurs

Author: George Mangion - Senior Partner PKF Malta
Published on Malta Independent: 9th August 2022

It was a bright idea to film part of the movie Jurassic World Dominion in Malta and its release last June has been met with a warm reception after an absence of four years as a sequel.

Much has been done in recent years to improve Malta's tourism offering and experience. Since 2013, there has been generous grants to Air Malta to save it from bankruptcy with a number of manpower reforms to trim its operating costs. Certainly, to assure us of a swift revival we need increased connectivity, infrastructure, new niche markets, reduced seasonality and much more.

All competing countries in the Med have seen increased patronage,  some even exceeding the pre-Covid numbers. Whether Malta succeeds to boost its image as an exciting destination is too early to say, but after two years of lockdowns and false starts, lost time, hotel occupancy rates need to be recouped.

Cynics tell you that the chaotic state of the island this summer, marred with a burden of road repairs (first impression when landing at the airport) and noise pollution from never-ending construction, does not augur well to recoup revenue lost during the pandemic. Some lament, that the erstwhile young minister for tourism is being challenged by many problems and most expect him to act like Moses with a rod striking the waters to halt the rot in the sector.

To be fair, during the pandemic closure, government was generous with the hospitality sector paying millions to workers caught without work. The Malta Tourism Authority (MTA) even launched an innovative new incentive to attract visitors during the pandemic - it effectively gave them cash when they book hotels. During the 2021 season, tourists who booked hotels direct could qualify for a €200 cash back from MTA. However, now the challenges ahead of us need to be tackled and the industry needs to adapt to survive in the long-term. At the airport, to kickstart the season, officials from MTA opened the Arrivals Lounge to hundreds of thousands of tourists looking to enjoy a few days of sun and sea.

This year, due to climate change, most of the Mediterranean resorts are facing sweltering temperatures and our island is no exception. The proviso is, that in our case, the average visitor on landing is greeted with the congested roads, dust and intermittent noise from tower cranes (also in villages), a scare that can be compared to a chase with the dinosaurs - a movie partly shot in Malta (see picture). But the goose that lays the golden egg so needed to boost our post-pandemic deficit is now being force fed to squeeze its precious foie gras badly needed to nourish our deficit hungry Castille apparatchiks.

It does not rain, it pours as the island faces annual deficits. One never anticipated that after milking our reserves dry for two years to finance the cost of furlough workers (Malta Enterprise boasts of saving 100,000 jobs), we are now faced with soaring fuel and food prices. These are feeding inflation, eroding the purchasing power of households and triggering restrictive monetary policies. To top it all the ace card that will make us attract rich visitors has not worked this year. Tourists who visited the country in the first six months spent an average of €109 each day.

Regretfully, the average spend dropped by 2.5% over the past three years. It is a sign of the times that the quality of tourists we are attracting are mostly low-spending tourists with a preference to choose four-star hotels and AirBNB accommodation. Numbers are improving but they will not reach pre-pandemic levels.

Quoting MIA CEO Alan Borg, he expects 2022 tourism numbers to compare to those registered in 2015. In fact, surveys show that total tourism expenditure between January and June reached only 76% of that in the same period of 2019. The figures were published by the Malta Hotels and Restaurants Association in a survey carried out by Deloitte covering the first two quarters of 2022. Interesting statistics available on the MTA website show that, in 2019 (a record year) tourists reached nearly 2.8 million including overnight cruise passengers and contributed a remarkable 11.6% of GDP. This year, the adverse effect of the Russian invasion of Ukraine has pushed the EU to fight food inflation and make preparation for alternative gas supplies should Russia retaliate against sanctions by cutting off gas supplies.

Yet, in spite of huge efforts to diversify energy supplies, the EU economy remains vulnerable to developments in the energy markets because of its high dependence on Russian fuel oils. Could this be part of the reason why tourists in Malta are spending less money than they did before the Covid-19 pandemic? Be that as it may, it was a brilliant idea to attract the filming of Jurassic World Dominion in Malta. In the exciting movie, velociraptors leap over the Mosta church and chase lead characters through the streets of Valletta. This Hollywood production heavily features Malta's rich baroque architecture as dinosaurs chase actors Bryce Dallas Howard and Chris Pratt through the ins and outs of Valletta alleyways, coming to a stop to show us St George's Square in Valletta completely overrun by dinosaurs of all kinds.

In conclusion, Tourism minister Bartolo carries a plastic smile on his face and appears hopeful that Malta is going to have a good summer in terms of tourists' arrivals this year. In this regard, perhaps the time has come for the Ministry of Tourism, the Ministry of Foreign Affairs, the Ministry of Finance & Employment, together with all the relevant stakeholders including the MHRA, to come together and find a better way to spruce up the beaches, village centres, cut down dust/noise from construction sites and possibly reduce VAT on hospitality to stave off the rising cost of dining and accommodation. Readers do not expect to challenge the myth that a velociraptor's rib steak will taste tender if cooked medium rare at any restaurant when ordered and served in Mosta's square.

Author: George Mangion - Senior Partner PKF Malta
Published on Malta Independent: 9th August 2022
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