Last Updated on Thursday, 7 January, 2021 at 9:44 am by Andre Camilleri
Daniel Borg, CEO of The Gozo Business Chamber and Abigail Mamo, CEO of The Malta Chamber of SME’S, reflected upon the surreal festive scenario that hit every business sector across Malta and Gozo, together with The Malta Business Weekly.
Despite the colossal impact of Covid-19 and restrictions in place, both Mamo and Borg agreed the picture wasn’t as dire as could have been. Gozo saw over 25,000 visitors flock to the island, with images of traffic queues to reach the ferry dominating our social media feeds over the Christmas and New Year period.
Areas such as domestic tourism notably picked up, which was good news for the accommodation and catering sector. Regarding Gozo, Borg noted “It is evident that this festive period cannot be compared to previous years. However, this was generally good when one considers the overall situation during this very particular year. As evidenced by the Gozo Channel, thousands of people crossed over to Gozo to spend their vacation on the island for the New Year period.
This had a positive impact locally, notably for the hotels and rental accommodation sector. When it comes to restaurants, we must consider the effect caused by limitations currently in place regarding seating capacity. For example, group dinners in restaurants (which were typically a characteristic for this period) did not occur. However, the general sentiment is that considering the prevailing situation, the domestic tourism sector’s economic impact was good. As I noted, the decrease in numbers is evident, and some sectors suffered more than others.”
Speaking to The Malta Business Weekly, Mamo echoed Borg’s sentiments with regards to Malta, “Restaurants managed to pick-up sales, but we have to keep in mind that restaurants are operating with lower capacities due to Covid-19 restrictions and other catering establishments suffered since they weren’t allowed to serve alcohol.
Hotels also improved during the festive season thanks to domestic tourism, though numbers are very different from the usual years. Usually, the festive season would be considered as a peak season locally”. Both CEO’sCEOs note that a good number of businesses have scaled back to reduce costs and survive; meanwhile, others also had to close their doors.
When it comes to those hit the most, Borg told this newsroom, that Gozo saw clothing outlets suffer due to a lack of demand for clothing pertaining to the events that usually accompany the yuletide period. Borg added “The lack of need also applies to those involved in the entertainment industry, such as providers of sound systems. The fact that the events taking place this year dropped dramatically had a significantly negative impact on them. Over the past years, the island of Gozo has been positioning itself as a cultural focal point when it comes to seasonal events”.
In terms of Malta, Mamo added, “In general, businesses are not complaining about sales, especially since they consider the effect of the Covid-19 pandemic. Businesses are aware that had this been a typical year, sales would have been much stronger; they were, however, managing their expectations in view of Covid-19 and such expectations have been met in general.
During the festive season, Non-essential businesses reached an average of 50% sales compared to 2019, while businesses related to home improvements and home decor continued to improve sales throughout 2020. The majority managed to reach the 2019 sales levels, sometimes even exceeding them.
Meanwhile, businesses that depend on events and other businesses that have been forced to close obviously had a difficult festive season in terms of sales”
Regarding the recent announcement of the next batch of government spending vouchers to be issued in the coming weeks, Borg remained optimistic for Gozo, “I think that the voucher injection will be helpful here. The voucher scheme will provide that much-needed confidence at a crucial point in time, inducing people to make individual purchases which may not have been made during the Christmas period. Overall, the outlook is that these vouchers will continue to provide a much-needed breathing space for businesses to continue to operate during the crucial months ahead in Gozo”
Mamo added “The new voucher injection will be very important for businesses to maintain a basic level of earnings. One concern is that the vouchers will come at a time when an increased level of cases will be experienced, which always has a very negative effect on business. This might mean that it will take longer for vouchers to be utilised; however, these are still very important during this stage.”
Mamo concluded that the Malta Chamber of SMEs would commence a business survey throughout 2020 and the Festive Season. Results will be published later next week.