Keystone tourism sector ‘on its knees’

Corinthia

The Cabinet is set to discuss the second tranche of economic aid following several representations made by industry experts. The Malta Hotels and Restaurants Association was one of the associations who discussed the current situation in the sector with the Prime Minister Monday morning. The association pressed for urgent measures to ensure that the once burgeoning tourism industry does not fall victim to COVID-19. Newsbook.com.mt is informed that the second wave of economic aid is planned to be unveiled by the government towards the middle of this week.

Tourism, a key component of Malta’s economy is in serious jeopardy due to COVID-19

On its knees

“In all our marketing analyses, we figure in unforeseen elements: earthquakes, wars. So, you steer clear of areas prone to these. We never figured for a global pandemic, let alone one of this calibre.” This was the wry assessment of a lecturer in marketing who preferred not to be named. In his assessment, he said that this COVID-19 pandemic has brought the tourism industry to its knees and in Malta, this blow is felt very strongly. Newsbook.com.mt spoke to several operators within the industry who gave very frank replies on condition of anonymity. Their apprehension was palpable, and their concern was for their observations not to reflect on the entities they worked for.

Pathos

Informed sources in the tourism industry have told Newsbook.com.mt that hotels in Malta are at various stages of being brought to their knees. Some five-star hotels have let part-timers and probationary staff go, while keeping the full-time staff either as skeleton staff or enforcing leave. Some, on the other hand, are still operating. A major hotelier, speaking on condition of confidentiality, said: “If you had spoken to me three weeks ago, even, I would have said that the problem was recruitment”. This wry comment underscores with the pathos of the situation in this core industry which has been nurtured and developed over decades into a keystone of Malta’s economy.

A perfect storm

The operators who spoke to Newsbook.com.mt  observed that the current dire situation was not due to economic variables. They said that Malta was competitive in the sectors it chose to compete in with regards to tourism. The zero-demand was triggered by fear. This, they assessed was a potent factor which would need time and a specific set of measures to overcome. “Ideally, we should be planning what to do when this perfect storm is over, how we are going to push the re-start button” said one operator in the five-star sector. “Ideally, labour-intensive industries like hotels should remain open”, remarked another, adding that training for quality staff takes time.

Post-Covid-19

The operators were all united in their calls for sector-specific solutions, with many mentioning the MHRA and the Malta Chamber who were lobbying hard for government to address the problems. Earlier, Perit David Xuereb, President of the Malta Chamber stressed the need for a sector-specific approach which addressed those sectors whose life-expectancy was severely threatened. Instead, he said, the government has not taken appropriate steps to decrease the risks of heavy job losses. The operators concurred and added a further factor.

 “With the flow of the pandemic, the effect of and recuperation from COVID-19’s blow to tourism depends on the current phase of the pandemic in specific countries. Malta needs to have a good idea of when the pandemic in Malta will phase out so that the industry can calibrate itself and government can assist accordingly” said a hotelier. Perit Xuereb sounded warning bells in his interview earlier, saying that the package as announced by government so far seems to have none of the country’s canny business sense to extrapolate where the industry will be in a post-pandemic scenario.

Hardest hit

This sector, which includes hotels and restaurants, is a mainstay of the national economy. NSO data pertaining to January 2019 shows that the sector employs just over 14,000 persons, 1,000 of which are in Gozo. 12,000 are employees while 2,000 are self-employed.

Another 8,700 are employed on a part-time basis and for two-thirds of these, the part time job is a primary job. This means that their part-time job is their only source of income.

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