Strategic Challenges
Departing from the current situation with the objective of reaching the objectives of this Tourism Strategy by 2030 is subject to the recognition of the Strategic Challenges being faced by the Maltese Tourism Industry.
The 13 Challenges listed below represent Strategic Challenges. The term “Strategic Challenges” refers to those pressures that exert a decisive influence on likelihood of future success. These challenges drive and affect the destination’s future competitive position relative to other providers of similar products. They are presented in order of precedence and importance as follows:
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Re-directing potential investment in bedstock, into other key areas
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Minimising downward price spiral potential with resulting drops in rates
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Stronger integration of Sustainable Development Goals and the EU Green Deal
The Challenges in Detail
Rebuilding airline route network
Attracting a route network which serves Malta’s identified source markets, segments and connectivity needs.
Exploring alliances with airlines to grow sustainably in line with the destination’s needs and growth demands.
Following developments in the EU relating to aviation sector impacts on carbon emissions.
Ensuring a healthy mix of airlines in line with the destination’s complex requirements through the servicing of routes by legacy and low-cost airlines, also giving due relevance to the importance of the national airline to a destination fully dependent on air transport for its tourism.
The airline route network shall need to be rebuilt on the basis of a more holistic inter-relationship with other sources of tourism business to Malta which can generate the necessary demand to make routes viable.
Enhancing the Visitor Experience
Contemporary tourism is Experiential in nature. It is not two-dimensional but requires that visitors feast all their senses.
Tourism interaction, particularly in niches including sports, faith, wellness and underwater activity, is participatory rather than in spectator fashion and this needs to be borne in mind in the design and planning of attractions, events and activities.
Mobile technology and social media enable immediate, live uploads of the good and the bad. The former needs to be maximised and the latter minimised. Providing tourists with opportunities to project Malta in a positive way assists the marketing effort. The role of influencers needs to be maximised.
The Gastronomic experience needs to be further enriched through more sustainable practices, farm-to-fork concepts, locally sourced foodstuffs and a tangible link between tourism, agriculture, fisheries, food processors and eating places for the provision of authentic Maltese cuisine. Building further on brands such as Michelin and Gambero Rosso.
Prioritise and Invest in further development of key elements of the Product that are very influential on the tourist experience, such as access to the coast, beach development and other recreational facilities that need to be shared with the local community.
Factoring Corporate Social Responsibility principles into activities and events.
Need for an expanded shopping experience: from designer goods to artisanal products.
Focus on promoting what is indigenous to our islands.
Maintain the safety reputation which is highly valued characteristic.
A stronger integration of environmental ethics within the tourism value chain. Cleanliness, aesthetics and efficient management of highly visited locations and sites need to be prioritised.
Enhancing the visitor experience is to apply to all components of the value chain as it only takes one negative component to spoil the rest of the chain. This calls for more cooperation between public, quasi-public and private organisations which need to work more closely together to give tourists a better experience.
Improving the Country’s General Appearance
Tourism activity is not limited to tourism resorts and visitor attractions but covers the entire territory.
The tourists we attract mostly originate from countries where upkeep and maintenance are given top priority. This applies to the built, the natural and the marine environments. General upkeep and maintenance need to be proactive rather than reactive. In the natural environment, upkeep and maintenance contribute to national biodiversity targets and measures.
Standards in the levels of cleanliness, upkeep and maintenance need to be benchmarked at the highest level. Construction sites, in particular those in areas where tourists stay or visit, need to be managed in a way to level off negative impacts and discomfort.
An improved general appearance strongly strengthens tourists’ positive evaluation of their holiday in Malta. The inverse also applies in perhaps an even stronger manner.
Action needs to be taken to address certain high-profile eyesores negatively impacting tourists’ perception of Malta, through their identification, listing and discussing with public or private owners/operators on removal or relocation.
This principle goes beyond the direct remit of Tourism and needs to be embraced by all other entities outside the direct tourism universe.
The introduction of Smart Tourism management approaches to improve visitor experiences is pivotal to this.
Integrating quality at all levels of the value chain
Quality is not to be confused with luxury or high price Quality should prevail across the entire value chain. It is necessary to foster greater awareness amongst all stakeholders to embrace quality as the key to long term sustainability. Quality is rapidly becoming the decisive competitive instrument in
tourism and therefore there is a need to ensure that Malta’s image is improved as a quality destination focusing on all aspects of Product Malta and adopt a process of nationwide qualitative change.
Existing and New Operators not delivering or promising quality have no place in the revitalised Maltese tourism offer. A stronger Compliance and Enforcement deterrent approach will be needed to address this. To achieve this a top-level structure needs to be in place to oversee and ensure that the highest of standards are maintained across the country especially in highly visited areas.
Support for continuous training, innovation and the introduction of new products that can ultimately deliver a qualitative and varied tourism experience. Segmenting the tourism product into niches creates a better focus on requirements and needs.
Managing accommodation development
The current tourism accommodation sector has become more complex due to a number of issues which need to be addressed through reforms and actions:
Legislation not reacting fast enough to constant evolution leading to anomalies.
Hybridisation: Two mutually exclusive supply streams (collective and private) which require different strategic approaches.
Accommodation is a primary facet of the destination’s brand, character and offer. It should therefore be the most carefully managed element of the entire value chain.
Accommodation sector expansion has responded strongly to the ten-year period of growth that ended in 2019. However some imbalances have developed:
• Progressive increases in Collective accommodation which are set to grow further.
• The rapid expansion of private rented accommodation, which is nearing collective accommodation supply in terms of share.
• The operation of peer-to-peer accommodation on a year-round basis.
• Increased short-term dependence of accommodation developed for foreign workers which may be floated on the market for tourism purposes or mixed use until the workers return. This may also be impacted by expat workers currently teleworking from their home countries.
• The substantial, year-round availability of unlicenced and unregulated private rented accommodation bed-stock which needs to be addressed.
• Need to avoid the confusion resulting from the existence of official and operator-driven alternative classification systems.
Re-directing potential investment in bedstock, into other key areas
• Investment in tourism products, facilities and attractions provides alternative opportunities to investors who look at accommodation investment as the only way to enter the industry. Key investment opportunities exist in upgrading existing tourism supply and the introduction of novel products and experiences including in areas off the beaten path. Look for opportunities that may exist for PPP projects for the development of new products in line with market demands.
• There needs to be a better balance between investing in new receptive capacity, enhancing existing plant and introducing new products.
• The ultimate objective is to increase tourism expenditure through the availability of an increased range of enhanced products and services which require capital and investment.
Addressing the HR dimension
The relationship between Industry HR and hospitality, service delivery and skill gaps. Delivering service quality means going beyond the delivering of the bare minimum of expected service. Talented employees have moved on to other sectors and there is a risk of a profound talent gap which needs to be addressed through joint initiatives between the private and public sectors.
Need for the continuation of tourism employee training schemes to further build on the momentum of the extensive training opportunities introduced during the COVID-19 period through the allocation of adequate training budgets and associated resources.
Ensuring that a career in tourism scores high in the wish list of new entrants into the labour market.
Addressing the issue of foreign labour as a substitute to domestic shortfalls.
Improving the attractiveness of tourism employment through the provision of quality service training which instils pride in working for the hospitality industry, improved remuneration and career progression. Leading a process of converting payroll from a cost to an investment.
Working closely with educational institutions like ITS, University of Malta, MCAST and JOBS-Plus amongst others to draw a successful Human Resource Development Strategy for the tourism sector.
Increasing per capita spend
Net per capita spend by tourists needs to increase in reaction to an improved quality experience and offer.
Focus on increasing expenditure in those elements which are consumed within the destination.
Evaluate and identify the market segments that have added value to substitute under-performing markets.
Increasing tourism expenditure should not be due solely to higher prices but also to more extensive expenditure opportunities in experiences, goods and services which leave higher value added.
Per capita spend needs to increase at a faster rate than tourist numbers and overnights so that Malta will be able to generate higher per capita per night injections from its tourism. Revenues shall need to be offset against costs.
Reviving sector profitability
Malta needs to address the widening mismatch between its receptive capacity and the ideal numbers it should seek to attract.
The provision of Value is linked to the delivery of a Quality Service. The industry should have no place for operators delivering low levels of quality services. This needs to be identified sub-sector by sub-sector.
Avoidance of price-wars. Securing market growth against heightened competition by competing destinations to meet increased supply.
Meeting human resource challenges.
Recovering under Sluggish Conditions
Understanding and reacting to the factors which shall influence tourism recovery. The faster integration of quality in the offer will accelerate recovery.
Prioritising recovery on the basis of such understanding.
Communicating prospects to operators and investors in an informed and realistic manner to ensure that new operations are built on strong foundations and supporting through the creation of long-term incentives.
Ensuring that our product offer remains fresh and updated and avoiding the pitfalls associated with a tired product.
Minimising downward price spiral potential
A combination of over-capacity and reduced visitor numbers may lead to a downward pricing spiral which is ultimately detrimental to operations, quality and investment. Need to retain a sustainable pricing model. Need to introduce steps aimed at controlling and limiting over-development to avoid the generation of excess supply. Need to ensure that accommodation development does not dictate market
demands.
Ensuring a level playing field for all operators in the sector.
Risk of price wars will need to be addressed through a twopronged approach which maximises demand potential while channelling demand to licenced bed-stock. Price wars are ultimately of no benefit to any single operator, whether in the accommodation sector or elsewhere in the tourism value chain.
A policy towards controlled accommodation supply needs to be adopted to address volume and type of accommodation required over the years.
Raising the bar for all service providers, including both public and private services and including new market entrants in a more selective manner. This will necessitate the reforming of the licencing regime coupled with enforcing in a smarter manner.
Fostering cross collaboration across various digital tourism initiatives through the consolidation and better use of data
The consolidation and use of quality data improves the access to digital information and provides valuable knowledge to advance the local product.
Investment in new Technologies enables the opportunity to enhance the Tourist experience by offering more client centric services.
Nurturing digital cross collaboration initiatives across the Public, Private and Non-Profit organisations strengthen the Tourism Sector by connecting visitors and maximising the local Tourism offerings.
Smart use of emerging technologies such as Artificial Intelligence, Super Computing, 5G Network and
Augmented / Virtual Realities amongst others increases the value of digital tourism products.
Innovation empowers a destination to tap into emerging sectors in advance of slower reacting competitors. This approach is beneficial both to visitors and to the host community.
Strengthen the Market Intelligence Unit, produce data intelligence on a regular basis and share it with
stakeholders to generate greater awareness and contribute to the successful development of the Sector. Undertake benchmarking exercises as required from time to time.
Stronger integration of Sustainable Development Goals and the EU Green Deal
The Strategy shall enshrine sustainable development into all its actions by actively mainstreaming the principles of sustainable development together across all sectors.
Tourism operations will be encouraged and assisted into shifting towards more sustainable approaches
to development and operation. This includes accommodation, catering and food production, transport, entertainment, visitor attractions and venues amongst others. The inclusion of stakeholders to contribute to the measurement of sustainability KPIs is integral to this.
The further integration of tourism activity into the realm of environmental respect and sensitivity, in all of its aspects (such as biodiversity conservation) will be encouraged as a win-win situation.
Besides following climate change developments and their impacts on tourism, the Maltese Tourism Industry will also take steps to minimise its own impacts to achieve Climate Friendly Travel by 2050 through the adoption of applicable Low Carbon Development measures.