Ramping up Europe’s tourism potential

The Mediterranean tourism industry is in good health, hosting more than 30 per cent of the world’s tourist arrivals, but the sector has to step up its efforts if it is not to lose its competitiveness, tourism stakeholders agreed.

With its beaches and warm climate, sweeping views and various architectural, cultural and historical attractions, Malta held great appeal when it comes to attracting tourists, Malta’s former Tourism Minister Karmenu Vella said. He explained how last year’s performance was the best ever so far with a 10 per cent growth in arrivals, a 9 per cent growth in bed nights and a corresponding 9 per cent growth in revenue, with arrivals reaching 1.6 million. Mr Vella remarked how the tourism industry in Malta was continuously changing, with 52 per cent of Malta’s tourists today coming as individual travellers. More than 80 per cent of tourists were from Europe, and the island was now actively trying to attract non-European visitors. “Obviously the main obstacle to penetrate these markets are visa issues which are inhibiting tourism from the Middle East, Gulf and the BRIC regions,” he said.

Tim Fairhurst, Head of Strategy and Policy at the European Tour Operators Association (ETOA), also said that visa issues were clearly weakening Europe’s share of the global tourism market. He remarked that sales agents were more likely to recommend destinations to their non-EU clients that did not require a European Visa and were therefore “less problematic”. Mr Fairhurst also campaigned against the EU’s special VAT margin scheme for travel agents. “We privilege non-EU destinations because the sales tax on the gross margin does not apply if the operator is selling a holiday to a non-EU destination.” In spite of this, the EU had enormous potential to grow as a tourism market, in terms of attracting European as well as international travellers. He said Malta had an opportunity to develop higher value-added products. “Destinations prosper when they respond intelligently to what prospective visitors need or want, when they take local needs properly into account, and when they focus on what they do well. Malta is surely well-placed to do all of these.”

With the aim of improving the tourism sector’s competitiveness, the Maltese Government had taken a number of initiatives, Mr Vella pointed out, namely increasing the tourism allocation in its first budget, encouraging more joint public-private marketing, encouraging new airlines to fly to Malta and existing airlines to open new routes, as well as the identification of winter markets to reduce the seasonality gap. “Seasonality is one of the chronic weaknesses in most of the Mediterranean destinations,” the former Minister said. In order to reposition Malta as an all-year round profitable operation, the island planned to go for more winter products such as nautical, medical, sports, fashion, religious, cultural and cruise tourism. The industry’s changing nature called for constant investment, removal of unnecessary barriers, innovative products and services and enhanced visitor management, Karmenu Vella concluded.

Seeking the Endless Summer

With 300 days of sunshine, Malta was not only luring tourists to its shores, but also rising numbers of expatriates, John Huber, Governor of FinanceMalta, a public-private foundation for the promotion of Malta’s financecentre, pointed out. The island offered a number of residence programmes for foreigners relocating to the island, “with the main advantage being that the programmes have a flat rate of taxation of 15 per cent on all income that is received in Malta,” Mr Huber said. In 2014, the government had also launched the Individual Investor Programme, a programme that grants nationality by means of residence and investment in Malta. Mr Huber said: “Much was debated in the formulation of this programme; but I feel we now have a programme that is workable and that is also the only programme of its kind endorsed by the European Commission.”