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Malta’s Tourism Picking Up Steam But Inflation ‘Hiccups’ Expected, Lobbyist Philip Fenech Predicts

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After two years of stop-start COVID-19 restrictions, Malta’s tourism industry seems well on the road to recovery, but hiccups should be expected in the months ahead, one of the country’s leading business lobbyists has forecast.

Philip Fenech, deputy president of the Chamber of SMEs, said that the “feel-good factor” has returned to Malta and around 1.8 million tourists are expected to visit the country by the end of the year.

This is significantly more than 2021 (1 million tourists) and 2020 (660,000 tourists) but still way below the pre-pandemic figure of 2.7 million registered in 2019.

He partially attributed this shortfall to the fact that aeroplanes only maintained 80% of the capacity they had back in 2019, as a result of the strict COVID-19 rules Malta had in place up until a few months ago. 

“We knew that planes were already planning their summer routes from last year, and because Malta was more stringent from a health perspective, some airline companies plotted more routes to other countries,” Fenech said.

“It was a balancing act between health and the economy but competitor countries like Greece which were more liberal are now forecast to exceed their 2019 tourism figures.”

With the COVID-19 situation improving across Europe, hence Malta scrapping most of its restrictions, Fenech is forecasting a positive summer season, arguing that many potential tourists have a pent-up desire to travel and cash to splash after not going on holiday for the past two years.

However, he warned of potential stumbling blocks in the post-summer period.

Besides the fact that many businesses are facing the prospect of having to repay loans and taxes that had been postponed during the pandemic, inflation in Europe has skyrocketed following Russia’s invasion of Ukraine, including in the UK, which is one of Malta’s major tourism markets.

Inflation is set to have the double effect of making potential tourists spend more on basic items at home (therefore leaving them with less money to spend on a holiday), while at the same time making a holiday more expensive.

This can range from fuel inflation pushing flight tickets up to a mere English breakfast getting more expensive as a result of inflation in both eggs and cooking oil.

Fenech said the solution should be for Malta to strive to attract tourists who have more money to spend. 

“This doesn’t mean that everything should be deluxe but that everything, from a takeaway joint to a lodging, should be up to standard in every aspect. That’s what quality means.”

In this vein, he is heartened by major infrastructural projects that businesses commenced in the midst of Malta’s pre-pandemic tourism boom and which are now nearing completion.

“There are 18 projects in Paceville and St Julian’s alone, not to mention all the refurbishments and extensions that hotels carried out, not to mention similar moves in the retail industry,” he said. “A lot of these products will modernise us, pushing the older type of properties out of the market or forcing them to reinvest.”

“This shows how resilient Maltese entrepreneurs are. Their investment was harder to finance during the pandemic as they weren’t meeting their prior projections but they ploughed on and they’re now slowly seeing their projects realised.”

What do you think the future holds for Malta’s tourism sector?

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Tim is interested in the rapid evolution of human society brought about by technological advances. He’s passionate about justice, human rights and cutting-edge political debates. You can follow him on Twitter at @timdiacono or reach out to him at [email protected]

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