Background
Tourism in Malta is a vital contributor to the overall GDP and a major source of employment in the economic sector. Malta receives approximately, 1,130,000 tourists per year however, in the past years tourism in Malta has been affected by a series of events which led to a decline in the high number of visitors that Malta was receiving a decade ago.
Tourism in Malta is a vital contributor to the overall GDP and a major source of employment in the economic sector. Malta receives approximately, 1,130,000 tourists per year however, in the past years tourism in Malta has been affected by a series of events which led to a decline in the high number of visitors that Malta was receiving a decade ago.
One significant contributor to this has been the rise of low-cost carriers which have changed the face of tourism of the Maltese Islands. This type of service has proved to be a double edged sword where although these airlines have extended the tourist base from other parts of Europe, the island of Gozo in particular is losing its share of the domestic tourism. The Maltese that traditionally used to travel to Gozo for their weekend breaks now have another opportunity to go to European destinations at cheaper prices.
The Maltese government has also strived to diversify the sun sea product of which the islands’ are highly dependent. Malta’s overall tourism competitiveness was downgraded from the global 25th position the country was placed in by the World Economic Forum (WEF) a year ago to a 29th position for 2009.
Behavior over time
Tourism has mainly risen between 1987 and 1994 but after that time there has been little growth. Year 2006 recorded a significant drop in tourists compared to the previous and following years and thus led the Maltese government to introduce incentives to attract new airlines and new routes to encourage tourism growth from LCCs. These new services had a positive impact in attracting new European traffic which grew by 10.9% in 2007. This also led to a significant increase in tourist numbers especially the UK market which grew by 50,000. In the face of the global financial crisis, Malta’s tourism figures for 2008, which showed an increase of 3.8 per cent over 2007 in departing tourists and an increase of 2.2 per cent over 2007 in total nights spent by tourists was a positive sign for the local tourism industry. NSO figures also show that the number of tourist arrivals in January 2009 is 12,000 less than January 2008.
Existing Policies
The government action on tourism has focused on prioritizing the sector by diversifying tourism in terms of purpose of visit through effective marketing and branding. Another issue of concern to the Maltese Government is the attraction of a more affluent visitor to Malta, to shift the Islands’ dependence on tour operators, to increasing accessibility and to encourage a different kind of visitor. Incentives have been undertaken by the government to support these policies by introducing cost incentives for new routes to encourage LCCs to include Malta as a base in 2006 and to expand the country’s air links with European destinations. The most recent Tourism Policy for the Maltese Islands (2007–2011) strives to justify the recent changes by alluding to both tourism and broader economic policy objectives outlined:
1. An incentive to increase accessibility to and from Malta, not only for tourism but also for other economic activities.
2. A desire to attract new business catered by these carriers and which is not at the expense of existing business.
3. An aim to combine air carriers and different business (tour operator, independent).
4. Prohibit the reliance on any one air carrier or an overriding position of one carrier
5. Keep existing airlines which besides making Malta accessible for its major source markets it also provides interlinking traffic and connections to long haul source markets, whilst providing additional services such as cargo air services.
6. Adhere to the EU’s competitiveness and state aid regulations to ensure a level playing field for all airlines
(Ministry for Tourism and Culture, 2006, p.40).
Policy Concerns
The primary issue is whether in the longer term the LCCs will be able to attract different kinds of visitors to Malta. This will help the government achieve its objectives in generating more urban and cultural tourism and in reducing the seasonal pattern of tourism in Malta by attracting more winter tourists. However LCC travelers to Malta appear to be no more interested in history or culture than the typical tourist in past years. Moreover, they do not seem to be inclined to take short breaks or to travel more in winter. Ryanair actually blocked some of its routes in the 2008/2009 winter schedule for this off-peak season due to the high fuel prices which further discouraged flight operation with empty seats or short yields. The finding shows that Malta is being highly affected by falling international demand as a cause of the global recession, and is also offering tourists the least value for their money. However, a significant % of the visitors in 2007 who were first time visitors indicates that there is a high potential to attract a new type of customers to Malta.
Study purpose
The purpose of this study is to see whether LCCs are diversifying the demographics of tourism in Malta, the nationality of the visitors, and if the product is changing as well to the promotion of culture. This study will also elicit the success of the objectives of the government outlined in the Tourism policy for the Maltese Islands.
Behavior over time
Tourism has mainly risen between 1987 and 1994 but after that time there has been little growth. Year 2006 recorded a significant drop in tourists compared to the previous and following years and thus led the Maltese government to introduce incentives to attract new airlines and new routes to encourage tourism growth from LCCs. These new services had a positive impact in attracting new European traffic which grew by 10.9% in 2007. This also led to a significant increase in tourist numbers especially the UK market which grew by 50,000. In the face of the global financial crisis, Malta’s tourism figures for 2008, which showed an increase of 3.8 per cent over 2007 in departing tourists and an increase of 2.2 per cent over 2007 in total nights spent by tourists was a positive sign for the local tourism industry. NSO figures also show that the number of tourist arrivals in January 2009 is 12,000 less than January 2008.
Existing Policies
The government action on tourism has focused on prioritizing the sector by diversifying tourism in terms of purpose of visit through effective marketing and branding. Another issue of concern to the Maltese Government is the attraction of a more affluent visitor to Malta, to shift the Islands’ dependence on tour operators, to increasing accessibility and to encourage a different kind of visitor. Incentives have been undertaken by the government to support these policies by introducing cost incentives for new routes to encourage LCCs to include Malta as a base in 2006 and to expand the country’s air links with European destinations. The most recent Tourism Policy for the Maltese Islands (2007–2011) strives to justify the recent changes by alluding to both tourism and broader economic policy objectives outlined:
1. An incentive to increase accessibility to and from Malta, not only for tourism but also for other economic activities.
2. A desire to attract new business catered by these carriers and which is not at the expense of existing business.
3. An aim to combine air carriers and different business (tour operator, independent).
4. Prohibit the reliance on any one air carrier or an overriding position of one carrier
5. Keep existing airlines which besides making Malta accessible for its major source markets it also provides interlinking traffic and connections to long haul source markets, whilst providing additional services such as cargo air services.
6. Adhere to the EU’s competitiveness and state aid regulations to ensure a level playing field for all airlines
(Ministry for Tourism and Culture, 2006, p.40).
Policy Concerns
The primary issue is whether in the longer term the LCCs will be able to attract different kinds of visitors to Malta. This will help the government achieve its objectives in generating more urban and cultural tourism and in reducing the seasonal pattern of tourism in Malta by attracting more winter tourists. However LCC travelers to Malta appear to be no more interested in history or culture than the typical tourist in past years. Moreover, they do not seem to be inclined to take short breaks or to travel more in winter. Ryanair actually blocked some of its routes in the 2008/2009 winter schedule for this off-peak season due to the high fuel prices which further discouraged flight operation with empty seats or short yields. The finding shows that Malta is being highly affected by falling international demand as a cause of the global recession, and is also offering tourists the least value for their money. However, a significant % of the visitors in 2007 who were first time visitors indicates that there is a high potential to attract a new type of customers to Malta.
Study purpose
The purpose of this study is to see whether LCCs are diversifying the demographics of tourism in Malta, the nationality of the visitors, and if the product is changing as well to the promotion of culture. This study will also elicit the success of the objectives of the government outlined in the Tourism policy for the Maltese Islands.
Questions that the study will address
*How many of the visitors that came to Malta from 2006 to 2008 via LCC have been newcomers to the islands?
*Are LCCs contributing to a decline in the domestic tourism or is it boosting tourism evenly in both islands?
*Are LCCs actually contributing to decreasing the average length of stay in the Maltese Islands?
*Are LCC passengers more interested in the islands’ history and culture?
*Will high fuel and airport costs eventually reduce the expansion of routes and therefore the growth in Malta by Low cost airlines?
*Are Low cost carriers merely facilitating existing custom in terms of tourism flows, or whether they are attracting a different kind of visitor?
Links
· http://www.independent.com.mt/news.asp?newsitemid=84173
· http://www.nso.gov.mt/site/page.aspx?pageid=56]
· http://www.independent.com.mt/news.asp?newsitemid=84173
· http://mta-news.info/0902/pr14/
· http://www.maltatoday.com.mt/2009/07/19/interview.html
· http://www.maltamediaonline.com/?p=5409
· www.mta.com.mt/uploads/3058/1285/Segments_report__2_.pdf
· www.timesofmalta.com/articles/view/20080418/local/ryanairmay-
cut-winter-routes-to-malta-because-of-costs
· www.nso.gov.mt
· http://www.mta-news.info/0705/
This is a very interesting problem to approach from a systems dynamic perspective. The tourism industry has historically been one the the major sources of income for the country and its continuous decline is troubling.
ReplyDeleteIn addition to what you are analyzing, I would try and find out the effect that bad tourism practices has had on the industry. Many of us natives are well aware that many restaurants and bars charge more when you are not a native and taxis are a total ripoff. Surely this has not gone unnoticed by the tourists, most of whom are retired British citizens, who are responding by
1) Not returning
2) Spreading the word to their friends and probably through the internet to spend their retirement money elsewhere.
Yes Dane thats a good suggestion which should not be overlooked. However I think the problem also lies in the actual type of customer that LCCs are attracting to the islands and other countries. Most of these visitors do not come on holiday package tours and thus their length of stay on the islands is rather short. This is an upmarket trend in tourism where international travel for short breaks is common.
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