Tourism: Time to Act

Vince Farrugia

We have become experts of the superlative. We're the best, we often read. On this, on that, or on the other. Or among the best. In practice these terms mean nothing unless they are placed in a proper context. Benchmarking really. What one can do is establish what is the standard for a certain activity and then compare with what is the acceptable and recognized standard.

In tourism we often read and hear many superlatives. One might think that the world should be grateful that we exist as no one can live without us. The truth is that if we take some standard measurements we quickly recognize how much we still need to do to improve our product and our performance. That is why it is so important to measure against the others, against the competitors. And in tourism they are all our competitors. Furthermore people have alternative uses for their money so the travel and tourism trade is competing against all others enticing us to spend our money on their product or service. More than that we're competing against all other countries. Internet has widened the market and multiplied the competition. People seek on the internet even the most exotic or strange country to travel to. So we can no longer sit tight and look only at the Mediterranean resorts as our competitors.

We need to stop thinking we are unique. We must look at where we stand in the competitiveness league. One great exercise on travel and tourism competitiveness is conducted yearly by the World Economic Forum. On 4^th March 2009 they will publish their Travel and Tourism Competitiveness Report 2009. It is worthwhile at this stage therefore to look at the various rankings and scores Malta obtained in the 2008 Report. After March we can then compare whether we made much progress. Not progress against ourselves, as journalists often do as they swallow the bait of those who publish statistics as interested parties, but progress against the rest in the market. The T&T Competitiveness Report has the input of all organizations that matter in the areas related to Tourism and they are authoritative  experts in their field: World Tourism Organisation; World Conservation Union; World Travel and Tourism Council; International Air Transport Association, and experts like Deliotte and Booz Allen Hamilton.

The Report uses special themes for each annual report. This year's special theme is environmental sustainability and it covers issues such as identifying useful mechanisms for inducing travel related emission reductions; the way the green strategies will change; how the tourism industry will operate in the future; and how environmental sustainability has more generally become a key driver of tourism competitiveness. The Report includes insightful contributions from a number of industry experts.

In the overall score among 130 economies examined Malta ranks 25^th. In establishing the ranking the TTCI Report tests 14 pillars of travel and tourism competitiveness.   These include policy and regulations; environment sustainability; safety and security; health and hygiene; air transport infrastructure; tourism infrastructure; human resources; natural resources and cultural resources.  And, of course, price competitiveness in the T&T Industry. But the emphasis is not on just price. Price is very important in tourism but increasingly less so since a price is for a product and unless the product is right the price is not so relevant.

The pillars are organized in three broad categories of variables that drive and facilitate tourism competitiveness: the regulatory framework; the business environmental for travel and tourism and the infrastructure; and the tourism human, cultural and natural resources. In practice three major influencing and deciding factors are measured: government involvement –  health security, environment sustainability, rules and enforcement prioritization of tourism; the business private sector element, including air transport, ground transport and handling, ICT infrastructure; tourism investments in hotels and infrastructure and of course price competitiveness; and the third sub index category includes the human and cultural elements of each country's resources endowments.

The report gives each country a score scale of one to seven and it is careful in what is measurable so that the figures become easily comparable. In 2008 Malta scored and ranked as follows:

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Policy makers should give this Index a lot of importance and do all they can to get the whole tourism and travel sector to improve the scores. Government has a lot of influence in the first category group. Ranking 42^nd on environmental sustainability and 51^st on policy rules and regulations for example, is simply not good enough. Scoring high on safety and security, (12^th) and on health and hygiene (10^th) is commendable and should be emphasized more in our marketing. Our ranking on cultural resources is 30^th. This proves how right are the environment and culture pressure groups to keep insisting for greater awareness of our cultural heritage and the urgent need to invest more to protect and enhance what we have.

The private sector, in my view, should also make a much bigger effort. Ranking 34^th on ground transport infrastructure justifies fully Austin Gatt's determination to move fast on the track that leads us to an improved public transport service and to facilitate new and innovation infrastructural projects.

Ranking 19^th on the tourism infrastructure score also shows how much more we need to do. This score gives us the stimulus to act and take the opportunity to invest more.  A period of recession is a good time to review the infrastructure and to devote more resources to upgrade. We cannot just wait and hope the revival will come and everything goes back to what we assumed was a comfortable normality. We must act now to upgrade and seek new market niches through new investment both public and private. Government must ensure that the private sector has greater access to finance. Government should ensure that the Banks are more amenable, that we make full use of all funds made available under the EU Stimulus Package and that government entities do not force themselves on the  sector private  to squeeze entrepreneurs out of whatever capital they have available for investment.

 Ranking 32^nd on the ICT infrastructure agenda is also not acceptable. We have invested a lot in this field as a country and as private businesses. We need now to press on for more improvement. Believing as we do that we are the Smart Island should have given us a better ranking. But it's not just what we believe.

Of course the most shocking ranking is the 100^th position among 130^th other countries Malta tourism scores on price competitiveness. This is extremely serious. We must all put our heads together to start really cracking this hard nut. Price remains very important. The other elements grow to compensate price sector negatives but we cannot hide away from this one. It is a very bad ranking and we need to target action to resolve this price competitiveness issue.

The resources category sub-index also gives us stunning shocks. Overall 43^rd ranking for Malta is bad. This is one area where we have been used to the superlatives, for too long we have believed we are the fior del mondo, that we are among the very best. The truth is we are not and we must sweat to improve. Natural resources can improve with intelligent investments. Human resources should however be a prime target for improvement. This can improve in the short to medium term by a determined and strategic training programme. Natural resources are harder to improve but we also can if there is enough determination. What, for example, is stopping us from improving our beaches? Why do we have to kill off all projects that will give us new beaches, new golf courses, new nature reserves?  Ranking 129^th is incredible. We cannot really be that bad. This is an area where we need to act very carefully as it is the life-blood of tourism. And ranking 129^th among 130 cannot really be worse. Achieving a ranking of 30^th cultural resources is bad enough. Again this is an area were we can target improvements and draw action plans to achieve practical results.

Tourism needs a measured approach. It is too important for us. I am confident that Mario Demarco, Sam Mifsud and Josef Formosa Gauci, our top three on tourism policy and management,   believe in the measured approach. They deserve all our support as we must get this one right.  Tourism will always remain vital for us. Now is the time to act. We must measure against the competition. The short term immediate problems need to be tackled first: we must get more tourist coming and we need the airplane seats to get them and at the lowest price possible. But not this only. The Report clearly indicates that for tourism in Malta to remain sustainable and an important engine of economic growth we need to plan effective medium to long term action.