One million cruise liner tourists expected in 2024, and a new military tourism niche, Minister says

Last Updated on Thursday, 23 May, 2024 at 9:44 am by Andre Camilleri

Malta is set to welcome a million cruise liner tourists by the end of this year, while negotiations are ongoing for a new type of tourism niche including the military sector, Tourism Minister Clayton Bartolo said on Wednesday.

Speaking during the Malta Hospitality Forum, Bartolo said that the cruise liner expectation set for this year is a significant increase from the 800,000 tourists that came to Malta last year.

Moreover, he also said that in the coming weeks and months, the government will also be holding talks for the long-haul market when it comes to air connectivity, with countries such as the US, Japan, Australia, and those in the Gulf. With this, Bartolo said that the tourism industry will enjoy more opportunities for people to choose Malta as their destination.

In general, Bartolo said that the tourism sector, for the first quarter of the year, had superseded figures achieved in the same quarter of 2023. Moreover, he said that in terms of air connectivity, the country has also increased connections with the UK, which Bartolo described as being “our biggest market.”

He said that the government is working towards diversifying its source countries to welcome tourists from more places, as well as also diversifying the age distribution and the motivational spectrum for tourists to come. He said that this current generation of tourism industry is the first with the widest array of data intelligence which can be used to do things in a more sustainable way.

The minister said that in order to future-proof the tourism industry Malta also needs to invest more in public cleanliness. On this the government is investing €6 million in cleanliness equipment to be used in tourism zones, “setting the bar higher”.

Moreover, on new niches, he said that the government is underway with negotiations to open military tourism. He said that currently the ministry is taking stock of what Malta can offer for this new niche, in order to offer it all year round.

Bartolo said that to attract more quality tourists, quality and quantity need to go hand in hand by offering new experiences whilst also remaining sustainable. As an example, he said that there could be situations where a tourist would be recycling in a five-star hotel, whilst also eating at a family-run restaurant rather than a luxurious option.

“We all need to do our part for visitors to exceed expectations,” he said.

Jumping onto the skills card, which is now obligatory for every employee working in the hospitality industry to have, the minister said that this is one of the characteristics for quality service to elevate across all levels. In general, he said that in order to future-proof the tourism industry, whilst remaining sustainable, one needs to always keep the economic, social, and environmental aspects in mind simultaneously.

Present for the forum was also PN’s shadow minister for tourism, Mario de Marco, who said that the government, unlike any other sector in Malta, invests in the tourism industry for an immediate return on investment. Describing the sector as the goose which lays the golden eggs for the economy, de Marco said that “we need to be careful and protect that proverbial goose”.

He said that certain elements of the Maltese tourism product are suffering from “tourism fatigue”. He questioned whether the Malta International Airport was expanded enough as it is to cater for the tourists if they increased and also questioned how the country would cope with an increased number of tourists.

On parts which could improve to offer a better touristic experience, de Marco highlighted the country’s infrastructure, public transport, the health sector, energy generation, and the waste management system. He said that if the increasing arrivals keep growing together with the population, the economic model needs to start diverging from its dependency on the high labour intensive market as intensive platonic can negatively affect the tourism industry indirectly, which in turn will cripple the economy of the country. De Marco noted that since a decade ago, Malta has increased meaning that the infrastructure needs to better cater for the people.

The PN MP also made reference to Malta’s potential carrying capacity of 4.7 million tourists by 2027, following a study done in 2022 by the Malta Hotels and Restaurants Association, in collaboration with Deloitte Malta. However, he said that despite the study going in the right direction, there was very little discussion on the figures. Despite not advocating for a cap on tourism capacity, de Marco noted that Malta needs a planned approach on the matter, and set realistic targets.

De Marco also questioned the Malta Tourism Authority’s marketing strategy, and asked whether it was still feasible for the government to invest in recurring funds and check on the cost of benefit. He added that the MTA has no objective transparency criteria, “resulting in lack of accountability”. The PN MP urged for a discussion on the matter to discuss the issue which he hopes will lead to a more equal level playing field for competitors.

Moreover, he said that air connectivity should be given more importance, given that it is one of the main pillars for the tourism industry. Whilst noting that KM Airlines cannot be compared to Malta’s previous national airline, he said that more needs to be done to avoid the same fate of bankruptcy. “Sometimes we have to follow rather than lead,” he said, whilst questioning whether it was time for Malta to spread its air market share with other airlines like in other countries.

On his end, MHRA President Tony Zahra also commented on this aspect and said that “it’s clear decision makers need to take decisions which might not be very pleasant.” Zahra said that, when it comes to tourists, “the American market is the best market, people spend the largest amounts of money.”

Commenting on the future-proofing of the hospitality industry in general, the MHRA president said that the problems within the industry lie in the very basics. He said that industry operators need to ensure they are offering the best hospitality experience by having well-trained people who are customer-facing, who smile, give good service, and find purpose in their job. Zahra also mentioned artificial intelligence as a tool to better curate customer profiles.

“Adapt and adopt, otherwise we are going to be left behind,” he said.

Key Findings from the Hotel Performance Results for Quarter 1 and Restaurants Survey

In a report by Deloitte Malta, data showed that in comparison to the first quarter of 2023, the first quarter of 2024 saw an increase in tourist arrivals by 17.7%. The number of nights tourists chose to spend also saw an increase of 31.3% for the same period.

In the same quarter, when compared to 2023, tourists preferred to spend their nights in collective accommodation, which saw an increase in market share to 58.4% from 55.3% last year.

In a survey involving 46 hotels for the first quarter of 2024, 18 of which were located in the Sliema-St. Julian’s area, figures showed that tourists preferred to stay in five-star hotels. Presenter Financial Advisory Leader Matthew Xuereb said that five-star operators have seen rates approaching pre-Covid levels in the first quarter of 2024.

Despite having a more rapid recovery post-Covid-19 pandemic, four-star hotels led in their average daily rate, which increased by 13.7% during the first quarter of this year compared to 2023. The four-star hotel category also led in non-accommodation income, with a 12.2% increase compared to 11.1% in five-star hotels. In the three-star category, there was only a 0.8% increase.

Overall, the most significant payroll cost increase was seen in the three-star hotel category with a 29.3% rise for the same period, followed by a 15.7% increase in five-star hotels and a 10.7% increase in four-star hotels.

In the restaurant survey, a total of 45 restaurants participated. Xuereb noted that given the lack of participation, these results are not representative of the industry.

Figures showed that 60% of respondents came from family-owned restaurants, with 63% of these stating they were first generation. In the first quarter, these restaurants reported under 50 daily covers, with fewer than 100 over the weekend. When compared to 2023, restaurant owners reported the same median spending of €25-€35 per person in the first quarter of 2024.

Additionally, these restaurants employed 80% of their personnel who are non-Maltese. Figures show that 62% of these employees have spent more than two years with the same establishment, and overall their employers are rather satisfied with their performance.

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