MTA mounts offensive as experts warn of tourism slump
Karl Stagno-Navarra
An intensive marketing campaign to attract more tourists to Malta from its main core markets is to continue during the summer months, in a bid to counter the effects of a global recession, that so far has seen a decline in tourist arrivals this season.
The reason for the extension is that the market is experiencing the increasing phenomenon of last-minute bookings and also is feeling the effect of recession that is hitting its main core markets.
While prospects for next winter look daunting, and hoteliers accuse the Malta Tourism Authority (MTA) of not doing enough to attract tourists to Malta, MTA insists that its advertising campaign has never been so intense as this year, including for the first time TV campaigns in five core markets – as opposed to the UK only as in previous years – the UK, Germany, Italy, France and the Netherlands.
The cost of these campaigns runs into millions of Euros and even though they usually end in May – which is the time most people would have planned their holiday – MTA has this year decided to continue the campaigns also during the summer in most of the core markets.
In his comments to MaltaToday, tourism expert Terrence Mirabelli explained that MTA has been engaged in aggressive and costly campaigns, however the facts are that the core markets are severely hit by recession, and there is little one can do to at this point in time when people are not travelling given the economic situation.
As the local sector struggles to face the effects of dwindling tourist arrivals, the UK branch of PricewaterhouseCoopers has dismissed the idea of a short-term recession in the travel industry, and is warning the trade to prepare for three to five years of reduced activity, reports the Travel and Hospitality Industry Digest.
With an 80% increase in travel company insolvencies from end 2008 to the first quarter of 2009, the start of this year has mirrored the level of insolvencies last autumn, when 13 companies in the XL Group collapsed.
This time around no single group accounts for a large number of failures, there are simply more small travel businesses falling at the first hurdle.
Ian Oakley-Smith, director of business recovery services at PwC, said: “History shows that there has always been a strong correlation between total consumer spend and consumer spend on travel.
“Travel businesses should therefore expect this trend to continue, which is likely to mean that spending on travel will decline for some time yet.
“In the last recession, holidays were impacted at both volume and value levels. This is likely to recur and will take its toll on travel companies.’
He added: “The travel market has swollen with both supply and demand over the recent boom years, but we are now headed into a new reality. 2009 will be a journey of discovery to assess how deep the recession actually is and therefore how long it will impact travel.
“The fundamentals suggest that demand will not return to the previously high levels, quickly.
“Travel companies must avoid making any short-term decisions now and focus on guiding their business through a medium term industry recession. In turn this will help them create a sustainable business model for the years ahead – both good and bad”.
Also, the Office of National Statistics (ONS) in Britain has reported that the number of visits to the UK has fallen for the first time since 2001.
The figures revealed that visits from overseas residents fell in 2008 to 31.9 million from 32.8 million in 2007.
The 2.7 per cent fall is the first year-on-year decline since 2001 – the year that British tourism was ravaged by foot and mouth disease and the September 11 terrorist attacks.
The ONS said that the decline was particularly marked during the last quarter of the year, when visits fell by 13 per cent on the same period in 2007, with business visits down by 25 per cent as the impact of the recession was felt.
The biggest fall was visits from Americans. Just three million visits were paid by Americans to Britain last year – down from 3.6 million in 2007. Americans fell to third place in the rankings of nationalities visiting Britain most frequently.
The ONS also revealed that UK residents made fewer visits abroad during the year. Some 69 million visits abroad were made by Britons, down 0.6 per cent on 2007, with the decline at its strongest during the last three months of the year.
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