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Matthew Vella
Former MTA chairman John C Grech has refused to comment over the ruinous conclusions in a Deloitte report on the Malta Tourism Authority’s organisation and its marketing of ‘Product Malta’, which delivered a general ‘no’ to the workings and effectiveness of the MTA in carrying out its mission.
And by extension, it is a thumbs down to the MTA’s former guardians, former Tourism Minister Michael Refalo and the chairman he appointed to steer MTA, Dr John C Grech, who resigned back in March following a conflict of interest involving his private interests and contracts issued by the MTA.
Contacted by MaltaToday, John C Grech said he has not yet read the report and will not comment about whether he actually intends having a look at what reads as an indictment of his tenure at the MTA. Former Minister Michael Refalo, who read the report, was indisposed and could not comment.
With nobody ready to take ownership of the report’s conclusions, which was drawn up in collaboration with the current MTA management and members of the tourism industry, Deloitte’s review, is a clear indictment of the policy which guided MTA between 1999 and 2004, and a blueprint of what the industry wants.
It effectively describes MTA as having betrayed its very own raison d’être, failing to take on a “strong leadership role in the industry”. In its five years of operation, MTA hovered above a decline of four per cent in tourist income, and a reduction of 87,000 arrivals, seven per cent down from 1999.
The report also offers a glimpse into the myriad of quangos which mushroomed over the last five years, many of them replete with labyrinthine structures, a lack of financial control, and a general history of incompetence. The final verdict on MTA is that of a “disjointed organisation with ineffective co-ordination”, characterised by territorial mentalities, empire building, and hazy leadership.
Chairman Chris Grech, who replaced John C Grech in March, said he agreed with the conclusions of the report: “It speaks for itself. It specifically outlines problems and enthusiastically puts forward the solutions.”
With his tenure up for renewal in December, MaltaToday asked Grech whether he is considering staying on at the helm of the beleaguered MTA: “That is something personal. I’d rather not answer that question. At this point, that matter should not be confused with talk on the report.”
The accusations are clear – urgent calls were made on improving the environment, not least “transforming the shabby state of the country” by upgrading heritage sites, cleaning beaches, and upgrading road networks.
Paramount in the list of shortcomings was sub-standard service, sea pollution and the location of fish farms, no blue flag beaches, complaints of overcharging, and of course the lack of adequate golf course development, that bête noire of the environmental lobby. But the mention serves as a catalyst for a renewed effort into the creation of a golf course, a site of which could include the stretch of garigue from the hotel complexes at St George’s to Bahar ic-Caghaq.
The report certainly shows the heavy hand of the private sector, a clear show of no confidence in the MTA’s workings. The Malta Hotels and Restaurants Association was foremost in its calls for an audit of the authority’s workings. MHRA president Winston J Zahra played a part in contributing to the review, but denies the final verdict is a reflection of John C Grech’s stewardship:
“The MHRA asked for a full audit of the authority and not of Dr Grech. An authority the size of MTA does not depend only on the leadership of its chairman but on many other elements within it especially the management structure operating it on a daily basis.”
The MTA structure surely came under serious fire: it was accused of being top-heavy, with too many board members, split loyalties, no clear leadership, ineffective committees, complex organisational network, weak communication, territorial work practices, a tendency for units to branch out independently, and a declining staff morale.
That must be certainly frustrating for chief executive Leslie Vella, who was unavailable for comment at the time of going to print, and whose role comes across as one of frustration and exasperation, stuck in the centre of an uncontrollable MTA. Deloitte remarks that the CEO was undermined and blatantly by-passed, “structurally powerless”, and had “no ability to lead or coordinate” the directorates and boards: “Although there is a CEO there is no clear ‘Captain of the Ship’ who steers the organisation and on whom all responsibility for the organisation’s performance lies.”
Between 1999 and 2004, Malta’s market share in its core markets declined sharply: the UK (-17%), Germany (-35%), Belgium (-19%), and most notably the Netherlands with a staggering decline of 43 per cent in its market share. It sent a clear message to the government, which for years used the events of 9-11, SARS and trouble in the Gulf as scapegoats for the deteriorating industry: “it is not appropriate to blame the various external shocks to the industry for the reduction in tourism volumes… this decline in market share is likely to be largely attributable to product weaknesses and ineffective marketing.”
With no major low-cost airline flying from the UK or Germany to Malta, the report said Malta was not participating in the wave of growth of no-frills airlines: “Malta is still very much a tour operator destination whereas the share of outbound air travel handled by tour operators has been falling sharply as a result of the growth in low-cost airlines… Malta is instead competing to retain its share in a declining market segment.”
MTA’s overseas network, absorbing 64 per cent of the authority’s budget, was described as being too autonomous, not as cost-effective as it should be, and had no central call centre. In short, too large and expensive.
Criticised for having developed several strategic plans that had delivered little action and poor results, the MTA’s strategy was described as the equivalent of “giving someone an address without providing a map of how to get there”.
The private sector is waiting to see the results of an implementation strategy based on the Deloitte recommendations, hoping to see the MTA go the way they want to see it, and one which also lays down Malta’s unique selling point. Prime Minister Lawrence Gonzi is expected to head an inter-ministerial working group to tackle the long outstanding deficiencies with ‘Product Malta’.
“The question that we need to ask ourselves is whether we had the best tools,” Winston J Zahra remarks, “by way of our product and the MTA structure, to deal with such a situation and ensure the fastest possible bounce back when the international situation returned back to normal.”
matthew@newsworksltd.com
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