Land reclamation: if we can create something iconic, then why not

Jacob Borg speaks to MHRA President PAUL BUGEJA about the prospect of land reclamation, the challenges faced by the hotel sector and the need for a long-term tourism plan.

Malta Hotels and Restaurants Association (MHRA) president Paul Bugeja believes that land reclamation, if carried out properly, could be a golden opportunity for Malta to create a brand along the lines of Dubai.

“I am in favour of land reclamation if it is done the right way with all the necessary studies, and not just for the sake of reclaiming land. There have been countries such as Dubai that have created a brand out of it. If there weren’t all those mega shops and mega buildings, you would just have a desert and you would have no reason to go to Dubai. They have created something out of nothing. If in Malta we can create something out of nothing that is iconic, and people would want to visit it, then why not?”

Mr Bugeja drives home the point that Malta should not take a ‘them and us’ approach when it comes to tourists, as major projects and infrastructural work ultimately benefit the Maltese as well.

“It is not just about tourists. We Maltese are here to stay. We are permanent tourists. We are experiencing what others are experiencing for a short time. If we can get things in order for ourselves, then automatically we are getting them in order for the tourists.

“I understand that the government has quite a number of projects in hand; I am not privy to any of them but, again, I would not be against land reclamation if it was done the right way.

“Such projects should be undertaken to enhance the employability and potential for people to work in Malta and to allow tourists more ways of experiencing different products, especially innovative products. We should seriously consider any projects that are innovative and viable for Malta.”

Tourism police concept ‘a little bit stretched’

From next year, ‘tourism police’ will be patrolling tourist hotspots such as St Julian’s and Bugibba. Tourism Minister Edward Zammit Lewis has said that these officers will have to be proficient in foreign languages and well-informed about the tourist sites in their respective areas.

The MHRA president is not yet quite sold on the idea, saying that the concept is ‘a little bit stretched’ and the role of tourism police must be defined.

“I agree with some kind of special assistance for tourists. We need to decide whether they are police, or whether they will function as a sort of mobile help desk. They can be dressed as policemen, but then their attitude, and the information and support they offer, has to be kind of different.”

The key starting point, he says, has to be what will constitute the actual difference between tourism police and regular police.

“I think first we need to discuss the role of the police, and then the role of the tourism police. Let’s analyse this. A policeman is not only there to make ensure that the law is obeyed, but also to offer people help when they need it. I think this is where the subtle difference is. It is the same debate with the wardens. Are they only there to issue fines or are they there to help you?”

Mr Bugeja favours a greater police presence in tourist areas, and especially in Paceville and Bugibba, as Malta risks gaining a bad reputation.

“We need more police in such areas, but their role should be geared towards offering support and information. They should not be there just to prevent fights. I think the idea of having tourism police is good, but it needs further discussion.”

Public transport: We haven’t heard many complaints

The government’s take-over of the bus service from Arriva at the beginning of the year has not caused the major disruptions that many expected, though Mr Bugeja cautions that the real test is yet to come this summer.

“To be honest, I have to say we have not heard many complaints about the bus service. In the past, when the service was still being run by Arriva, it was in the news every day and usually for the wrong reasons. Lately, we have not heard of too many incidents.

“Although I’m not a user of the service myself, we have not received as many complaints as we usually do. The big test is yet to come this summer, with the increase in tourists.”

Mr Bugeja says that the amount being spent by the government to run the service may be of concern.

“What we do know is that it has been a costly exercise. We hope it is not going to be overly costly for Malta to get the service right.

“We understand that the government’s subsidy is €30 million, but figures are being fired all over the place. So we are not sure whether it is €30-€40 million or less, in terms of how much the exchequer has to put in to get it right. It’s very important to get it right. It’s not only about public transport, but roads and traffic on the roads.

“We need to strive to be more professional in everything we do. If we fix up a road, let’s do it right the first time. If we are going to organise an event, let’s organise the before and after.”

Need for more cleanliness and attention to detail

According to Mr Bugeja, the lack of cleanliness and attention to detail are two areas where Malta needs to up its game in order to be more appealing to tourists and offer the “warm Mediterranean touch.

“Let’s not forget what we are selling here. Is it about the sun and the sea? No, for me it is about the memory. As a holiday, you are not selling the bed or the food; it is the Mediterranean hospitality experience that you are selling.

“Unlike when you are buying a physical product, when you buy a holiday you do not take anything back with you. You have the photos, the experience and the memory. And in reality, that is what we are selling. We’re sell- ing an experience. If that experience can be enhanced by the little things, then it can make a big difference.

“It’s about giving that little extra which is not expected. The more you can offer, the greater the demand will be. The higher the demand, the higher the rates that hotels will be able to charge.”

Need for more coordination among Mediterranean destinations

Malta cannot go it alone in today’s competitive world, Mr Bugeja says. The MHRA is working on bringing traditionally ‘rival’ destinations around the table in order to create an action plan for the Mediterranean basin.

“Last year we organised the first Mediterranean tourism forum. We are planning the second one for November. On a political level, we are getting all the stakeholders – including the ambassadors from various Mediterranean countries – around the table. We are discussing what the Mediterranean targets in terms of tourism should be.

“There is no point going to China to try and attract Chinese tourists here. If they come, they have to have a holistic visit, with two or three-point destinations in the Mediterranean.”

Although teaming up with Malta’s competitors may sound strange, Mr Bugeja is pragmatic about it. He points out that half of the tourist industry in the world comes to Europe and one-third of those tourists visit the Mediterranean. Therefore, Malta cannot afford to fall by the wayside if other Mediterranean countries are collaborating with each other.

“In today’s world, it is not a question of competition. If we really want to get attention from outside Europe or the Mediterranean, then we need to team up in order to appeal to markets in Asia and America.”

The ultimate aim of the Mediterranean tourism forum is to present a plan of action to the Maltese government to undertake when it holds the European presidency, Mr Bugeja says.

Four-star hotels lagging behind the rest

Last week, the MHRA presented its survey for the first quarter. Occupancy rates at three and

five-star hotels were up compared with last year, but fourstar hotels registered a fall in occupancy rates, resulting in an operational loss of €332 per available room.

Mr Bugeja puts the poor performance of four-star hotels down to a glut of competition and a need for refurbishment.

“There are about 50 properties in the four-star category, as opposed to the five-star, which has only some 15. This means that the supply is higher and the demand is lower, particularly during the winter months.

“There is also the issue of the product on offer. Some hotels need to upgrade to ensure that they are up to higher standards. You can see that the rates charged at four and three-star hotel are very similar, and that is because of the way they are being sold and the product on offer.

“The MHRA does not get involved in rates strategy, it just tells hotels not to panic and reduce rates. The rate has to reflect

the service, brand and the quality of the product itself. There are areas for improvement and we need to help the industry upgrade the product.

“During the first three months of the year, all properties made losses. This is a continuous trend. We have improved on previous years because the losses were lower, but this is not enough. We need to look at long-term viability and – obviously – to make profits as well.” Hotel overbooking a ‘challenging’ problem

Last week in Parliament, PN tourism spokesman Robert Arrigo raised the issue of hotels taking on more bookings than they can handle.

Mr Bugeja says the overbooking problem is a recent one, due to the ever-increasing number of tourists visiting Malta. He says that hotels should focus on better yield management, and contract at rates that are commercially viable.

“This is where yield management comes in. Yield management is planning in advance, picking up on the trends, looking at the segments and deciding which segments – as a hotel – you want to target, and then contracting at the right price, depending on historic demand.

“You can never make impositions on hotel properties regarding closing off or not to do any over-booking or close rooms at any point in time. These are a hotel and brand decision, and the main issue is possible that you’ll have tour operators that will not be happy with the situation.”

EU funds ‘a matter of timing’

A few months ago, The Malta Independent published an interview with an MHRA council member, who said that projects in the hotel industry are at a standstill due to the lack of EU-funding made available by the government.

Mr Bugeja says that the issue was blown out of proportion and that everything has since been sorted out with the government.

“It’s a matter of timing. It’s not about wasted funds or projects in the hotel industry grinding to a halt. In the next phase, there are no specific funds allocated to the hotel industry.

“The funds are going to be allocated to different categories, such as accessibility, IT, enhancement of the property, but they won’t be specifically for hotels. So hotels and the MHRA have to come up with ideas on how the industry can benefit in the different sections.

“The timeline for EU funding is September-October this year. We understand that by October there will be new schemes from which the industry will benefit.”

Long-term plans more important than short-term political goals

Tourism is a huge contributor to Malta’s gross domestic product and for this reason the government needs a long-term plan for the tourism industry, Mr Bugeja says.

“Tourism policy should transcend short-term political goals, which is why the MHRA is calling for a long-term strategic plan. The government is very much in favour of this – it is where coordination has to come in.

“The plan will not only involve the Tourism Ministry, and all those involved should put their heads together and work on it. This includes Air Malta, which MHRA reiterates needs to keep flying not only as a critical component of the tourism sector but more significantly as a pillar of the wider economy. Then we will have two to three-year tactical plans which will be finetuned every year.

“The direction has to be decided first, and then you have to see what needs to be done to put it into practice. I believe the MHRA can play a huge role in this.”

Photograph: Jonathan Borg