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Huge potential for Malta’s tourism industry to grow further

Paul Bugeja, CEO of the Malta Tourism Authority

Despite Malta’s record-breaking growth in tourism, the Malta Tourism Authority is focusing on new markets and niche areas to bring more people to the islands. With a calendar of over 250 events taking place throughout the year, there is no shortage of things to see and do, MTA CEO Paul Bugeja tells MaltaProfile.

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Can you give us an overview of the MTA and its role?

The main role of the Malta Tourism Authority is to market the Maltese Islands overseas and to look after the product locally. We look at enhancing the service that we offer. Our main focus is on the marketing side, both from Head Office in Malta and through our network of overseas offices. There are around 15 offices in different countries whose primary function is to market Malta within their source markets. We are also the regulatory body. On the local side, we license hotels and other establishments and we enforce the standards. What this means is that we check that our licensees are operating in line with their respective licence. We have to be a bit like auditors in this respect. We have other divisions such as product development, so that we can continue to enhance the product and go into niche markets. Another important department is the research and data collection division, through which we can study the data coming from source markets and gather feedback from whoever visits Malta.

What are the key markets for people visiting Malta?

The largest market for Malta in terms of volume is primarily the UK, where some 30% of our arrivals come from each year. From Italy we get around 300,000 visitors. Then there is Germany and France. Obviously there are various other markets that are on the increase. For example, we have seen growth in the number of tourists arriving from countries such as the United States and Turkey. We’ve seen a reduction from Russia in the past year because the rate of exchange is quite poor coupled with the political situation that prevails in the region. On the other hand, due to increased connectivity, we’ve seen growth from countries like Poland and Hungary, supported by the low cost airlines such as WizzAir, which is increasing its market share considerably. WizzAir are really well connected to Eastern European destinations.

Which markets would you like to focus on in the future?

We consider Turkey as having huge potential because people there want to visit new destinations and Turkish Airlines have doubled their flights throughout the week. Also, we would like to focus more on Eastern European countries. Whilst Germany is one of our core markets, we believe there is more that we can do there, especially now that there are more airlines flying from Germany such as Ryanair. Ryanair have indicated they would like to increase their networks between German airports and Malta, so we can work with all partners to capitalise on this opportunity.

What have been the key milestones in Malta’s tourism history?

In the last six years we have seen continuous improvement in numbers and the quality of tourists. Last year was the first year that hotels have reported profits in the first quarter of the year. Usually they would report losses throughout this period. Information from the MHRA published in September shows that hotels have improved their average rate on a cumulative basis by 10%. That gives us a good indication that the quality of arrivals has increased in Malta. Also, the statistics show that there has been an increase in average spend of over 2% per person. So there has been a substantial increase because of volume, but also per capita. This indicates that we are attracting higher spenders and at the same time creating events and opportunities where tourists can spend their money.

A big factor behind Malta’s success has been online marketing and social media. We don’t have big budgets to spend, but with social media everyone is on a level playing field. We have also become better in marketing Malta as a year-round destination, highlighting the events that we have here. People know that there is history; the temples, the churches, but there is more to Malta. We are highlighting that whenever you would like to come to Malta, there is something going on. Whether it’s the Baroque Festival, the Isle of MTV or the Maltese cultural events that foreigners may like to take part in. We have published a calendar online with these events. We are constantly co-ordinating with airlines also. So whenever we have a new airline operating to Malta, we make sure there is synergy. For example, 80 million people travel out of Germany each year, but we only see 130-140,000 of these tourists coming to Malta, which is a miniscule amount. Therefore, we keep discussing with airlines who desire to develop their business. We also discuss with airlines to at least extend the season as much as possible which is also happening. The exposure that CHOGM, the Valletta Summit, and Valletta’s nomination as European Capital of Culture 2018 have also helped to put Malta at the front of peoples’ minds.

What is your strategy going forward?

We would like to improve the quality of our arrivals, and this doesn’t just mean spending power. We’re trying to make sure all our services are up to standard. We are making sure our promises are delivered. We are ensuring there is a benchmark for restaurants through our quality label. In terms of hotel standards, we have increased the number of enforcement officers, and we have standard processes to ensure a fair and balanced approach. We have to be sure of our product before we start promoting and selling it. We want to decrease the impact of seasonality and in turn, hoteliers will invest more. This is already partly working as for example in October 2015, we hosted over 200,000 arrivals, which is the same figure we had in July of the previous year, which is a peak summer month.  The highest number of arrivals was in August 2015 where we hosted 250,000 arrivals whilst the lowest was in December there were 70,000. I think this proves there is potential to grow though there are always going to be product improvements that we can focus on.. People want quality for the money they pay. Another potential lies in the cruise passenger traffic where we have 600,000 cruise-liner passengers in Malta per year, in addition to the 1.8 million arrivals. Some come for 6-8 hours and see relatively little. We view this as a huge opportunity. These people have had a taste of Malta, but maybe they would like to come back for another holiday, so this is something we would like to work on.

How do you view Malta’s capacity to handle such growth in the tourism sector?

Hotels are expanding and adding additional floors, but we want to continue incentivising hotels to upgrade their whole product. By this we mean checking the standards of all rooms and not just the new sections of the hotels. We are ensuring self-catering apartments are up to standard also. There are also plans to build more hotels in various locations, including the south of the island, where available bed stock is low.

What are the key challenges facing the tourism industry today?

Employees. It is difficult for operators to find Maltese to work in tourism. We need qualified, skilled people, but we are careful not to over regulate this either. Having the right people in place who know about Malta to be able to provide quality service is paramount. We want to give back the feel of traditional Maltese hospitality and history to our visitors. Connectivity is another issue, although this is improving vastly, we would like more direct flights to more destinations. We see opportunities in America, China and India, however the main problem are issues with visas for travellers coming from Asian countries.

How important do you view Foreign Direct Investment for Malta and which areas do you think could bring more?

I think it is very important. There are many people coming here for residency nowadays and they are bringing investment. We would like to see more high spenders. If people have money to invest, they have money to spend. We would also like to see more foreign investment in hotels, at the moment this is mostly Maltese. We would like to have more international brands here in Malta, as it is useful for marketing Malta. I think the biggest opportunities are still in financial services. Property is another area that is doing well, always increasing in value and is always easy to sell.

What kind of niche tourism markets are there in Malta?

Sports would definitely be one that is growing. We now have winter training camps for 15 football teams and if we have more football pitches, we will bring in more numbers. The wedding market is growing, and we are seeing a lot of various nationalities visiting us to get married. Watersports is another niche, because, amongst other water sport activities, we offer some of the best diving experiences in the Mediterranean. Health tourism and wellbeing is growing as we see lots of yoga retreats becoming more popular. Meetings Incentives Conference and Events tourism has been on a steady growth path in recent years and I see this continuing, this market also attracts a higher spend. As Malta is traditionally religious and spiritual, with some of our temples being over 7,000 years old, I see this is another unique market we could tap into.

In terms of education, there are many English language schools here that attract thousands of international students year on year. The volume of students has actually decreased in the past years but the number of nights has increased. On average there are around 80,000 arrivals each year. It’s an opportunity because students bring more tourists with them, such as friends and family. More importantly, for many of these students, this would be the first time they are travelling without their parents, and if this is a positive experience, they will return throughout the rest of their lives.

How could you go about attracting higher spending tourists?

I think the film industry is a good opportunity for this, and we are working closer than ever with the Film Commission to maximise on the opportunities that emerge from this sector. We have had many US and UK film and TV productions which has been effective. Weddings are another niche associated with higher spending, especially from certain countries. For instance, there was one Indian wedding in March costing €3 million alone. However, we don’t just target people because they spend more money, but we look at all opportunities. It is more what we offer that matters. Everybody wants value for money and if you feel that you received bad service or that you have been cheated, you don’t spend. This is why it is imperative for us to deliver on all our promises.

Paul Bugeja has joined the Malta Tourism Authority as Chief Executive Officer in September 2014 following a 35 year career with the Malta based Corinthia Group of Companies.  Since joining the group in 1979, Mr Bugeja worked in various locations, both locally and overseas, taking up several key senior posts in Management and Finance within Corporate Office. Mr Paul Bugeja was the President of the Malta Hotels and Restaurants Association (MHRA) from November 2013 until his appointment as Chief Executive of the Malta Tourism Authority.  He was also a member of the Malta Tourism Authority’s Board of Directors during his tenure as MHRA President. He obtained his CPA warrant in 1989 after acquiring the UK-FCCA and the Malta FIA certification. He subsequently obtained FOH (HCIMA) fellow status.

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