Malta's tourism sector on record-setting pace (Feature)

By Herman Grech Dec 18, 2010, 2:06 GMT

Valletta, Malta - It is a day early in December and a public holiday in Malta, and traditionally one of the busiest Christmas shopping days.

But shopping is the last thing on the minds of hundreds of tourists, who strip down to their swimming trunks to bask in the glorious 23 degree Celsius sunshine on the beaches.

As Europe freezes over, the warm southern Mediterranean climate in December has been the icing on the cake for Malta, which is on course for a record tourism year in 2010.

Preliminary figures show Malta will see a dramatic 15 per cent increase in arrivals over 2009, exceeding for the first time the 1.3 million mark, according to the country's central statistical office.

Malta is expected to register the best tourism growth in the Mediterranean and the second largest increase among the 27 European Union member states.

Even more remarkable is a 23 per cent increase in tourism spending compared to 2009.

The results are surprising considering the odds were stacked up against Malta.

The international recession has forced many Europeans to choose domestic holiday destinations, a curse for an island-nation which relies almost entirely on air travel for its tourism.

Furthermore, national carrier Air Malta is in crisis, forcing the government to request the European Commission to authorise a loan to keep the airline's planes flying over the next six months.

Still, the government's decision to assist budget airlines to fly to Malta has proven a trump card.

Malta is currently connected by direct scheduled flights to 76 airports, up from 54 in 2009.

Increasing would-be visitors' access to airplane seats is part of a three-pronged strategy, the government's top tourism official Tourism Parliamentary Secretary Mario De Marco said.

Others components are improving the quality of tourism services and ensuring Malta is marketed in a cost-effective way, De Marco told the German Press Agency dpa.

The government's strategy to encourage low-cost carriers to operate from new or underserved markets has met with success as attested by an increase in arrivals from Spain, Scandinavia and Ireland, he explained.

Budget carriers generated an additional nine per cent in traffic in 2010.

'We concentrated on areas where we saw business decline and fought for new business, like (the hosting of) conferences,' De Marco said.

Tens of millions of euros have also been invested in upgrading the Malta's ancient attractions.

Malta, with a surface area of 316 square kilometres, has the highest concentration of UNESCO World Heritage sites second only to the Vatican.

The country is also investing in a varied calendar of events, ranging from baroque music concerts to the annual hip Isle of MTV music festival.

The mild weather, the safety record, and the fact that practically everybody speaks English draws thousands to Malta, even if some grumble that the numerous construction projects remain an eyesore while potholed roads hamper transport.

Tourism contributes to a quarter of Malta's GDP, with tens of thousands of the island's 400,000 inhabitants employed in tourism- linked jobs.

But not all is rosy on the domestic front, according to George Micallef, president of the Malta Hotels and Restaurants Association,

Hoteliers have protested loudly when the government recently decided to raise Value Added Tax on accommodation from five to seven per cent.

Micallef said the significant increase in arrivals does not automatically boost profitability for hotels, whose owners have also protested against what they say are hefty electricity bills.

'Hotel prices are still under pressure, and price remains the main determining factor when choosing a holiday. Pressure on prices is even greater when it comes to tour-operator business, which represents 45 per cent of Malta's tourist arrivals,' Micallef said.

He also stressed an island cannot survive without an efficient air connection, and the tourism industry is concerned about of Air Malta's future, despite pledges by the government to save the airline.

But operators are well aware that ultimately there is little a tiny country like Malta can do to combat external factors.

The fear is that austerity measures announced in Britain, which still represents the most important source market, could yet deal a blow to Malta's tourism in 2011.

Read more about Malta Tourism