Analyse of the sector 29/11/2010
Maltese Tourism Industry Remains Fairly Stable

In the face of the global financial crisis, the Maltese travel and tourism industry remained relatively stable in 2008, with some small gains. Although definitely affected in terms of growth rates (which slowed down considerably), it did not lose too heavily in terms of absolute volumes and numbers of tourists. Compared to other European destinations, tourism in Malta has performed well. Furthermore, with the adoption of the euro in January 2008, and finalisation of its application to the EU, Malta has positioned itself competitively for increased tourism activity. However, projections for 2009 see difficult times, like its competitors, in the tourism industry.

 

Continued Growth in Cruise Passengers

 

Despite the economic recession worldwide, the number of holidaymakers increased to set new records with cruise ship passenger arrivals to Malta accounting for a total of 550,000. They form a small yet significant proportion of tourist arrivals, with a higher-than-average daily spend.

Malta’s Grand Harbour is the fourth most important port of call in Europe and the island is also promoting Gozo by having a mooring facility outside Xlendi, which allows smaller cruise lines to make two stops within a short sailing distance.

 

Increased Competition in Airlines

 

Over the last two years Malta has seen an increase in coverage by low-cost carriers bringing tourists and business travellers to and from the islands. In 2008, additional low-cost carriers received permission from the Government of Malta and started their service: easyJet, with flights from London and Manchester, Norwegian from Oslo, Spain’s Vueling and Italy’s Volare.

Due to a lack of disposable income, consumers are gravitating towards value-for-money options and travellers have gained the benefits of increased flights competition, which is reflected in the increased volume of arrivals and departures in 2008. Low-cost airlines have been able to capture a significant proportion of the market share in a fairly small amount of time to the detriment of local airline Air Malta.

 

Growth in Internet Bookings

 

The penetration of the internet in Malta was 23.5% as of March 2009 and was growing at a rate among the highest in Europe. The boom of low-cost carriers has helped to develop the usage of the internet among Maltese consumers. As these tourists become more used to internet transactions, internet penetration is set to increase as tourists look for the cheapest available holiday breaks. The development of mobile internet technologies is expected to boost the usage of the internet in the travel industry with over 90% of Maltese people using mobile telephones, with room for growth as the European average is 119%.

 

Forecast Figures Predict Reduced Growth

 

As in the rest of Europe the growth of tourism and spend is predicted to slow considerably in the short term, with a view to a start of recovery in 2011. An additional negative factor has also been the strength of the euro, which increased against the UK pound by 18% over 2008. This has especially hurt the UK tourist arrivals over this period, which account for over 50% of all tourists coming to Malta. A combination of the factors mentioned above and the general negative global economic development will have slowing affects on Maltese tourism. However, this is somewhat offset by an increase in arrivals from other markets (Norway, Germany etc), the nature of Maltese tourism appealing to the older segment of the markets, which may be less affected, and continued efforts by the Maltese government to promote the destination.