‘We must diversify the Gozitan economy’ – Gozo Business Chamber CEO

Last Updated on Thursday, 19 August, 2021 at 12:20 pm by Andre Camilleri

The Malta Business Weekly interviewed Daniel Borg, CEO of Gozo Business Chamber, about the impact of the Santa Marija weekend in Gozo, and where the island can go from here.

Was the Santa Marija weekend what businesses had anticipated in Gozo?

Given the current situation and scenario, I think that business was as expected.  We also see different trends in the sector, which need to be appreciated, and therefore numbers need to be seen in the context of what we are now experiencing.

Was it an improvement upon last year?

Numbers have increased slightly, but as I indicated, numbers need to be put into perspective.  As reported in the media this week, there was only a marginal increase of the numbers of passengers and cars who crossed over to Gozo compared to last year.  Obviously, numbers cannot be compared to what we experienced in 2019.  However, it must be highlighted that there were no specific festivities and events. We are now seeing a more equitable distribution of domestic tourism over the whole year also fuelled by the fact that many Maltese people are buying a second home in Gozo.

According to figures released by the National Statistics Office in July of this year, in 2020 Gozo experienced an increase in domestic tourists of 133,217 an increase of 61.9 % over 2019, with an overall domestic tourism expenditure estimated at € 57.8 million, an increase of 61.2% of 2019.  The increase in the domestic tourism market was also caused by those staying in ‘non rented accomodation’, which figure increased from 68,328 in 2019 to 141,708 in 2020, an increase of 107.4%.  Non-rented accomodation includes those staying in their own private residence, and those staying with friends or relatives.

Did the fact the PH fell on a Sunday negatively impact businesses?

I think this factor did not impinge on the decision to visit Gozo.  Given the marginal increase experienced when compared to last year’s figures, and the context that we are now experiencing, i.e. no outside festivities or the absence of other traditional events which used to attract substantial crowds such as the ‘Wirja ta’ Santa Marija’, this did not have a negative impact.

Are businesses seeing a direct positive impact as a result of the new round of government vouchers?

Obviously any initiative which stimulates demand, in this case the government vouchers, has a positive impact in increasing or sustaining demand in the short term.  Many a times demand is also linked to the business sentiment and confidence prevalent at a particular point in time.  Given the current situation, such stimuli ensure that the demand is sustained during a period of uncertainty which all strata of society are experiencing.  As highlighted this is a short term measure, and the challenge that we will be facing in the upcoming period is to start restoring confidence in the tourism sector so as to ensure a rebound in foreign inbound tourism.  Nonetheless, we are facing many unknowns and this is a factor which has to be taken into consideration, as you cannot plan ahead.

Are you hearing any concerns from local Gozo businesses about the current scenario? Is enough being done to support them as we head out of summer?

I think that at the moment, the concerns are many.  However, one also needs to see the positives that such a period has brought with it, in that the need for changes that were previously long in the pipeline has been accelerated over the last period, making these issues more pressing.  It is for example, a positive to note is the introduction of the fast ferry service between Gozo and Malta during a challenging period for the Maltese economy.  This augurs well for the future, and we should be working in that direction.  This applies to all forms of accessibility.  Increasing accessibility to the island will ensure that Gozo will continue to develop at all levels.  Consequently, we should also continue to look at the possibility of restoring the air link between the two islands.  Moreover, the permanent link between the two islands should also remain a top priority.  One type of accessibility does not exclude the other. 

While Gozo is significantly dependent on tourism, it is also dependent more so than Malta in terms of the contribution to its economy of the construction and real estate sectors. 

As regards tourism the challenge will be to make this sector more sustainable. Gozo has a niche there which can continue to be exploited.  The concerns are significant at the moment.  The Government is assisting this sector massively.  However, the challenge will be to move from a system that is currently reliant on the wage supplement to one that starts moving on its own two feet.  Any entrepreneur in the tourism sector would like such a situation to materialise.  However, this is a very delicate balance to achieve.  We must not risk dismantling a sector which will be crucial for our economic recovery, especially if certain businesses decide to close down.  Many problems have been compounded with the COVID-19 pandemic, including the lack of workers in the tourism sector.  Some problems in the sector were already there prior to the pandemic.  Gozo was not experiencing the same rate of growth in foreign inbound tourism that Malta was experiencing prior to the Covid-19 pandemic, with increases registered mainly in the tourists who visit Gozo for a day.  This means that if we want to start emerging from this situation, we must adopt a long-term vision for our island.

The Covid-19 pandemic has also shown that we must diversify the Gozitan economy.  The over-reliance on certain sectors such as construction and real estate is causing significant problems in terms of the changing streetscapes in our towns and villages.  While acknowledging the importance of these sectors, we need to incentivise quality and sustainable buildings and ensure that proper planning is present within our localities.  The type of buildings being constructed in our towns and villages leaves an indelible mark that will be difficult or impossible to reverse.

Growth is possible.  But we must see the long term, including specific incentives for Gozo in the area of digitalisation and sustainability.  The investment in the second fibre optic link between the two islands and the Digital Innovation Hub in Xewkija needs to be sustained with a holistic incentive package to have companies in the digital sector setting up shop here in Gozo.

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