The Malta Tourism Authority (MTA) was formally set up by the Malta Travel and Tourism Service Act (1999). This clearly defines its role – extending it beyond that of international marketing to include a domestic, motivating, directional, co-ordinating and regulatory role. The Worlfolio sits down CEO Paul Bugeja and Carlo Micallef, marketing officer of MTA, to discuss the MTA’s important role and plans to develop Malta’s tourism industry.
Starting first with the EU Presidency, and what it’s going to bring to Malta. What are your expectations that you see benefitting the country?
Paul: Obviously, there are the immediate benefits of having so many arrivals in Malta in terms of numbers, but also the type of visitors that we will have. We will have a number of ministerial meetings, definitely we have to be organised. We’re not directly the organisers, but we’re supporting them. They have come to us to support them in terms of local activities, when they are entertaining, and whether they are also showing people around. So we provide guides and we provide transport and required collateral as well. But the profile of whoever is coming in the first 6 months, obviously and definitely will be different and higher than what we’re used to. Because, there will be many ministerial delegations visiting Malta, around 70.
Carlo: There are around 2000 delegates that are coming over, in that period
During the 6 months?
P: During the 6 months. And there are some that have to be organised by Malta, and some others would be organised in the peripheral. So they would definitely create more than just the numbers that they are quoting at the moment that we would be able to support. So there will be definitely more than those 2000 that have to be organised by the government.
And in itself, as we’re saying, different profile and different needs that they would have and we need look at what we can support and work. In the medium term, these same people obviously would then be, will be bringing the journalists with them, and we will also be inviting a number of journalists. That would give us the opportunity to continue to show Malta hands on, to the people that would come here, and as well to the journalists.
We had already this kind of experience last year in reality because we had the CHOGM in Malta and we had the EU-African Summit, on migration. It happened over a month basically, it was in November, first that one and then we had the CHOGM. So it was quite an experience for us and we did support intensively there. So it’s ... I wouldn’t say a re-run of what we had experienced, because it’s on a longer period of time, and there definitely will be more arrivals. But it’s less intense, I would say, than what we had in CHOGM.
Because you have the experience now to welcome this kind of crowd?
P: Yes, yes, yes. CHOGM was also held in Malta in 2005, so it’s again a re-run, but having two in the same month was a bit challenging. So when you look at the potential that there is, getting Malta on the radar, I think it’s very important. Actually this morning we had a member of parliament, a Hungarian member of parliament, who was in this breakfast meeting, and he says that Malta is not that well known in Brussels. So we said, let’s see what we can do with the MEPs there directly to ensure that Malta is known in a sense, not whether it’s one of the member countries, but what we can offer.
So make them some kind of ambassadors of Malta, in terms of tourism.
P: Yes, yes. See what we can do in Brussels, what we can present there, whether we can set up an office, a base or what kind of presentations we can be allowed to hold in Brussels. We have 6 MEPs.
We’ve seen a very unfortunate event in the recent weeks, with BREXIT, that may have some consequences here in Malta, given the special relationship both countries have. We see that, if I’m not mistaken, UK tourists represent around 30% of the arrivals. How do you see that impacting your sector in the coming weeks and years?
P: In the short term, we don’t see it will affect us in a major way. In the medium to long term we still have to see 2 things. The rate of exchange, obviously, that would play a difference. I haven’t monitored recently but it had gone down against the Euro, but I think it was rather on the high side. It was 1.35 and then it went down to 1.5. And then when the outcome of the BREXIT referendum was known, it went down to 1.18, 1.2. And that was a little bit of a shock obviously.
I: believe in the medium to long term, but that’s my opinion, but I’ve spoken about this in many instances. That both the central government, the banks, in the UK and in Europe, they will somehow make some adjustments to make sure that this imbalance will not continue. The most important point that we need to look into is whether there are any repercussions on the UK economy. Whether there’ll be certainty, whether people would not know whether they have a secure job, that businesses will continue to be there, because people would not then travel as frequently as they would like to.
British people, I think, would still travel. It will be a bit of a shock in between until things settle back. So we need to keep focussed to see whether there is anything we can do to speed up or focus our marketing spend in the UK more than before, in specific times of the year. We need to mark time in my opinion, we discussed it internally and we’re looking at September, October, to meet again with the plans of what we should do, depending on the situation. For this summer, we haven’t seen any major changes.
In terms of connectivity, what is being done to ensure that you still manage to have the capacity to receive more visitors?
P: From our end, we work closely with MIA, Malta International Airport. We have our own internal team to look at the opportunities. We attend, every 6 months, these international fairs. There are many fairs, called Routes, probably you know about them.
So every 6 months, every year for European and every year for International World. So it’s kind of every 6 months, we go. And we meet them regularly. We look at what we need and we meet one-to-one. It’s not like we hope or we wish. We just ask specifically. Most of the time it’s even what they have already established routes, we ask to extend. So if they were successful in summer, they would extend over the winter months. And there are times now that we’re extending it even between early March till late November. So that is kind of the extent we’re pushing airlines to risk a bit with us. And their schedules, they also have the availability at times, and at times they need to plan them in advance. And that’s why we keep on going, if not this year then next winter or next summer, and we keep on, kind of insisting that there is potential. Obviously it has to be a win-win as always. So when we discuss with them, we offer the support in terms of what we can offer. They also offer the support in their markets, because they know the markets better. Like for example, Wizz Air are specialised mainly in the Eastern European countries, they’ve done a great job in Poland, for example they are expanding over there. And they have the knowledge, local market, we have our representative there, we work together to see how we can increase, and we’ve seen a huge number of – obviously – arrivals from Poland, because there is the connectivity. For our island, connectivity is crucial.
You mentioned Eastern Europe. What are the other targetted markets that you’re looking at?
P: We have had our eyes on Turkey. We still continue to work on that. We will not give up, in spite of whatever is happening there. We still believe there is an opportunity. And that’s easier in terms of connectivity, because Turkish Airlines already operate twice daily. We have been discussing China and India for quite some time. Since I joined, it was already on our books to see how we can work towards achieving that objective. But it’s not an easy objective to achieve, because of funding mainly. We keep on asking the government to give us more funds to attract that market. But there is also the visa, which is a bigger challenge I would say. It’s a European level decision. We keep on trying to push the government to see how we can find other options. Because there are other countries like France that issue a visa in 48 hours
For Chinese, mainly from China. And for India. But there are procedures. And being a small country obviously the resources are at times not readily available. That’s one side of the globe. The other side, we believe that South America is an opportunity. Even if it’s longhaul, it’s not an issue. But we have not really taken the time and put aside the money to start addressing this market. Some of our English Language Schools have managed to make some inroads
C: They are particularly active in Brazil, Argentina, Colombia.
P: They’re active, and the visa issue is less of a problem. Because they can come to Spain, or Portugal.
C: Brazilians do not need a visa.
Brazil doesn’t need one, Colombia doesn’t need one, Chile doesn’t need one. Colombia was the latest they don’t need a visa to go to Europe anymore.
C: Our main challenge is that we don’t have the same network that France has in China. They have consulates, their own offices around China. They have an embassy in Beijing and a consulate just opened in Shangai. So, we don’t have the network, and we don’t have the manpower to process the visas very efficiently.
P: That’s the whole point. I still believe that it’s only a financial matter. I think if you put in people, you can get more money from visas, and then you can re-invest, etc. etc. But it’s not as easy as it sounds.
C: The problem of government accountants
P: As well, yes. Because if you charge 100 euro for each visa – I don’t know exactly the rates which other countries charge – but it’s not cheap. So you can re-invest with the money, but yes, governments have their own ways of operating. There is also the Schengen rules and regulations which have to be respected as well.
So, this is kind of a longer term strategy
If we look at next year, let’s say, where would you expect the arrivals increase to come from?
P: We have seen new markets increasing. If you look at the USA, for example, we have had nearly 20% increase in volume.
C: All markets are growing. In the sense that there’s still scope to grow in all markets. It’s finding the connectivity first, opening up new cities, new routes. Or increasing the frequency or the lack of operation of that route, and also finding new niches, new reasons, for those people to choose Malta. And we’re taking very valid initiatives in this sense, selling Malta to different niches. Say, one of the main programmes that Mr Bugeja launched this year, is an agreement for football training camps, generating business between January and March.
And the greatest programme for Malta, because we’re co-branded with big teams, like PSV Eindhoven, Legia Warsaw, and others. So we got the teams over, we got some supporters over, media, there’s great exposure in the country, there’s a lot of interest. And then we’re doing various events, say track or marathon events, party events, maybe, you’ve been in Malta, there is a great night scene here. A lot of parties, and we’re having these parties in the winter months: Lost and Found, Groovefest, Creamfields... We’re getting around 5 to 10 thousand for every event, over a weekend.
P: The bigger ones yes, there are smaller ones, but the range is between 3,000 and 10,000.
C: So, what we’re trying to do is to go, even say the UK, the UK is the market that we’ve been active in for the last 40 to 50 years. But there are still pockets, there are still segments, and demographics, which have not considered Malta yet. It could be, the LGBT market, weekend breaks, city breaks. We’re establishing Valletta as a city break destination.
So we’re not just selling Malta as a holiday, we’re selling a city break now. People, when they’re going for a weekend away, they mainly choose cities in the winter. So we never considered, when people are thinking of a city break, of Paris, of Vienna, to Budapest. Now we’re marketing Valletta as a city break destination, or the Grand Harbour region. So there is scope for growth in the four markets, and also new markets, or grown markets, like Eastern Europe, like Mr Bugeja mentioned. Until 2 years ago we had flights from Warsaw only, between April and September, October. Now we’re flying from 6 airports, 5 cities, and there could be more.
P: It doesn’t have to be from countries outside the EU. As Carlo was mentioning – and you know more than me in marketing – obviously you have a product and you can re-engineer it and sell it to the same people, but present it differently. So if you’re in the same market, and there is space where you can increase. For example, Germany, to us, to me, I know there is potential, to increase connection. There are about 80 million travellers out of Germany, and we get 140,000, which is miniscule. So with new flights they’re coming, RyanAir and other airlines, are coming on board. I see potential for growth for the coming Winter, and we’ll continue to grow. So it doesn’t have to be China or India or South America, which is fine, that will keep us, kind of keep the balance in terms of nationality and whether they can spend more or less. But if we look at different demographics within Europe, by type of why they will travel, by motivation why they would travel, and continue to push the reasons why they should come to Malta. We’ve, for example, substantial growth from Italy.
In terms of MTA as first and foremost a regulator, what are you doing to make sure that this quality is at the required level, and even go further, as increasing?
P: Quality, again, is a word that is frequently used and which sometimes can be misused in reality. But yes, I mean people can understand quality when they see it. And that’s the whole point, you cannot actually describe it but when you see it you know that it’s quality. And there are different levels that we are working on.
If we look at standards within the hotels themselves, we have – yes, unfortunately, I use the word ‘enforcements’ – but the end is not to enforce our standards, but the end is to make sure that the standards are there. In a sense, we don’t just want to go there like policing the place. But the scope is to support the industry, to make sure that they achieve the standards, at least the minimum standards by law.
But we’re going a bit further as well. We’re also specifying, for example, we have given permits to increase two floors in each hotel, who would want to. But it’s not just adding two floors. They are bound to have upgraded products across the board. And we will go, see it, I’ve been to a couple myself. If they say, “no we need only to increase the floors, floor levels, the number of rooms, and we don’t need to upgrade”, we go physically see, to make sure that that’s the case. Because we believe, and this, I was part of the committee before, at MHRA, to make sure that if they have, in my opinion, if they have the money to add two floors, they should have the money to improve the product, to upgrade all the other rooms.
That’s one side to the story. We have a programme of visits to the hotels. We’ve increased the manning in the enforcement section, there used to be 8, now there are 18. So there’s a full programme of inspections. And we started this year, they were inspecting, but not on a regular consistent basis with programmes discussed with hotels in order to see through upgrades. That is a definite and we’re coninuing to insist on what operators should have as a basic, and how they should be implementing improvements througout.
And they are in a good position. I mean, maybe in the past, they would claim that winter is bad, and money is not sufficient to make ends meet. But at this moment in time, if we miss this opportunity and we – I wouldn’t say let operators do what they want – but if we don’t push a bit, it will never happen. And that’s where we want to continue to improve and insist on the product itself.
I don’t know whether it’s a one-off, but last year we closed 3 hotels, for example. Even though they were rather big, people were saying we will use opportunities to increase the numbers, but if they will not have the standards, we closed 3. One is still closed, and the other 2 went through a program of refurbishment and upgrade, and we re-opened them again early this year.
What needs to be addressed to improve the reputation, the image of Malta, in terms of tourism?
P: Well, we’ve had organised meetings with hotels, we explained what we’re doing, and we’re sending the feedback to them. We’re picking on the negative ones at this stage. Because there will be too many to just send even the positive ones. Normally, you balance it out. But at this stage, initially, we’re working on the negative, and highlighting it to the hotel operators. What we’re doing – we haven’t started but it’s something that is planned – is that we collect all the negative feedback for, say, 3 months, and the ones that are really bad, terrible, we meet one-to-one. That’s the intention.
Another question I have for you is in terms of the environmental contribution. What was the aim behind this? And what will be the use of this contribution?
P: As you know, it’s one of the lowest in Europe. And probably in the world. If it’s not the lowest, certainly one of the lowest. You know, it’s 50 cents per person per night, maximum 5 euros per stay. And it’s only chargeable to adults over 18.
The intention is to put this into a fund. There’s a foundation which has been set up. There was a foundation but it will change its scope. It’s a Tourism Zone Foundation. It will change its scope. Whilst before it was like getting the money from the government specifically to focus on some zones, now it will be for the whole of Malta. The money will go in there, the fund will increase, it’s estimated to be, in the first full year, of about 4 to 5 million. The government will also supplement it from internal funds, government funds, I understand there’ll be another million or so added on. And this foundation will set kind of a trust fund there, and it will work on improving the products, ideally new projects, that will be sustained by this foundation.
So if there is, there will be projects identified, and that’s why it’s a bit different than tax. Because tax will go into the government funds and then if, the foundation or Malta Tourism Authority would have to go, request the money. These are ring-fenced, these funds. The government would supplement them, and whatever amount of money will be collected, this independent foundation, yes made up of government executives and MHRA, together will decide on what projects will be embarked, and funds used accordingly. So it’s a difference, there is a difference, a substantial difference. Yes, it’s managed by the tax authorities systems, but the money will not go into the government coffers.
So the money will be specifically for eco-friendly projects?
P: Specifically for sustainable tourism projects. It has to be related to tourism and it has to be sustainable and, the idea is to minimise also the impact of tourism.
I think it has to be done. Human nature as it is, there are, I mean, accessibility is not only for people with special needs. I look at it more on a wider spectrum. I mean, a family with a pushchair for example. So accessibility is wider than just people with long term mobility problems. And even the ageing population. When people grow older they need this kind of accessibility.
It will be short-sighted if we just say, “OK, there is volume, we’re going to ignore everything else.” To some extent, it’s like LGBT. I mean, we may not say, “OK we have enough people coming to Malta”. But if there is the need, and the government has identified this need in general, but not related to tourism, it’s just because there is the need, to open doors and improve the laws, then OK, we may capitalise on that, if we’re number 1 in Europe where LGBT rights are respected. There is nothing wrong for us to say, “Look, in Malta, this is what we are, this is what we have.” Yes, we capitalise on that USP. And the same thing for accessibility. I also keep saying that I, as a Maltese, am a 365-day tourist.