COVID-19

Is cyber-tourism the new norm?

The panel for this webinar was made up of Joseph Fenech (CEO, Corporate & Finance Corinthia Group), Johann Buttigieg (CEO, Malta Tourism Authority), Dr Charles Mangion (Chairman, Air Malta) and Franco Grech (CEO, Shortlets Malta).

 

Joseph Fenech – CEO, Corporate & Finance Corinthia Group

What is the impact that the pandemic is having on the catering, leisure and tourism industry?

  • People were still afraid when the country was at the initial stage of relaxing measures;
  • The industry has been overcoming the challenges of bad publicity;
  • Mr Fenech remarked that the current situation is one that we must learn to live with.

What is the impact that the pandemic is having on your business outside of Malta?

  • From a health and safety point of view, we are lucky that we are an island, but this fact also brings certain limitations;
  • The industry has not been built on the local market but depends more on the international tourist arrivals;
  • He noted that countries found in continental Europe have an advantage. This is because people who live in such countries and are afraid to travel by air, can travel by land;
  • A similar situation is being exhibited in the UK.

Are you looking at the internal market to give you back a sizeable amount of the business that has been lost?

  • The survey found that only 27% of people in Malta consider staying in a hotel;
  • ‘’It would be foolish if there is a market that can be tapped into and one ignores it;’’
  • Discounting is happening but the industry will not opt to slash prices to fill rooms, in order to maintain property value;
  • When hotels reopened, occupancy rates rose to 50% which exceeded his expectations;
  • Did not open all hotels together to just register low amounts of occupancy levels in each hotel;
  • They kept the Corinthia St George hotel only open and redirected other bookings from the group’s hotels to it;
  • This was done to augment occupancy and reduce operating costs.
  • As occupancy levels start to go up, other hotels will open.

Any concluding remarks?

  • We need to learn to live with this new reality;
  • Will take time to recover;
  • There is cautious optimism;
  • The catering, leisure and tourism industry will take longer to recover because there is a certain leap time, but we are doing our best and we are hopeful.

 

Johann Buttigieg – CEO, Malta Tourism Authority

What are your thoughts on how the internal market has took shape due to the pandemic?

  • "This issue is developing at a very fast pace, that it is an anti-dose of what happened in March”;
  • Market being regenerated;
  • The market was very fast to collapse but will recover at a faster pace than what we think;
  • People are ready to visit restaurants as we experienced this in past weekends;
  • Gozo is almost fully booked;
  • Certain niche areas in the capital are still suffering, so we launched a programme to address this challenge but has yet to leave its effect.
  • As of yesterday, we saw tourists roaming Valletta;
  • Airlines were looking at a load factor of 40%, but today we are looking at a load factor of around 70%;
  • For the first 2 weeks, we have between 12-21 flights per day and after the 15th July we will have between 14-36 flights per day;
  • We received about 8000 incoming air travellers and 2500 by catamaran in the first five days;
  • We expect these figures will double over the next week or two;
  • Our target is 100,000 tourists to spend their holiday in Malta for this month;
  • 25% of which would be returning tourists or business related.

Given that indoor restaurants have outside facilities, post summer they will face bigger problems.

  • A good number of indoor restaurants are doing quite well.
  • We expect that outdoor areas will still be used till November due to the mild weather.

The MTA continued to heavily invest in advertising outside of Malta.

  • Compared to other countries we remained competitive but did not invest quite heavily.
  • We have very good visibility on the searches people outside Malta make on the flight industry.
  • Searches from Austria and Germany about Malta has exceeded that of last year.
  • Correlation with the number of searches vis-à-vis with the number of bookings for airlines.
  • So, we expect better numbers when comparing to last year (one third of last year’s figures).
  • Things will be picking up at a good pace and we believe to achieve our goals.

Any concluding remarks?

  • Our strategy is to attract the younger generation (18-55 years).
  • Some areas in the industry need to readapt for their clientele.
  • We are confident that we will manage to get the numbers.
  • We are looking at how the international markets are performing daily.
  • We must ensure that there are protocols in place to promote Malta as one of the safest countries.

 

Dr Charles Mangion – Chairman, Air Malta

A questionnaire carried out by Grant Thornton reveals that 76% of the respondents do not intended on traveling abroad for leisure even though the airport has been opened. So how is Air Malta dealing with this?

  • The aviation industry has taken the hardest hit in this pandemic together with the accommodation industry;
  • The 76% figure is reflected in the bookings of flights with Air Malta
  • In fact, they experienced a 92% drop between March and early June;
  • This can be compared with recent landmarks in aviation history where the drop was of about 30%, including such as the financial crisis in 2008, the SARS crisis and the 2011 terrorist attacks;
  • Even though Air Malta concentrates on incoming tourism rather than outgoing, due to the spill over effect on the local economy, they have since still expanded their connectivity with the main capitals of Europe which helps local to travel. They have in fact developed a number of agreements with other leading airlines such as Alitalia, Lufthansa, Emirates, which allow Air Malta to connect to 200 countries abroad;
  • With the opening of the airport on 1st July, there was a positive initial reaction. In fact, there have been about 90,000 incoming bookings booked for the months of July and August which amount to about 30% to the bookings made in the same months in 2019;
  • The biggest setback has been through the staycation advertising made abroad. This means that people are encouraged to stay in their home countries and spend their vacation there. Furthermore, growth in the unemployment rate and reduction of incomes have also played a major role in the reduction of bookings;
  • Air Malta have instituted various initiatives to attract foreigners, by providing a more dynamic product and competitive prices. They must be provided with a more dynamic product with competitive prices. One such initiative includes the conjoining of the booking of the flight and accommodation, in order to provide reasonable prices;
  • Additionally, Air Malta have further infiltrated the social media to not only advertise their service but have also developed a new booking engine, a new website and a new app, amongst others which are more client friendly.

 

Franco Grech – CEO, Shortlets Malta

Alarming figures resulted from the questionnaire when respondents were asked whether they intend to use accommodation in Malta and Gozo, in which 47% respondent negatively

  • The market for the short lets and luxury villas ranges from luxury villas to studio apartments, both of which have been affected differently;
  • The villas have been “immune” to the pandemic. This was the result of various locals booking villas amidst the pandemic to self-isolate in luxury. This hence compensated for the cancelled bookings in the months of March, April and May;
  • Once the situation started to improve on the island, locals sought villas for weekend breaks since such luxury generates the feel of a vacation;
  • With the opening of the airport, bookings were also directed towards the villas;
  • There have in fact been little to no change in the occupancy levels of villas when comparing them to 2019;
  • The same cannot be said for apartments in the city. These have little to no open space and luxury which led them to perform badly during the pandemic. Taking apartments in Valletta as an example, which were in very high demand, little to no enquires have been made this year when compared to the high rates in 2019;
  • Furthermore, despite the opening of the airport, bookings are still being cancelled to-date. This is the result of the cancellation of most flights;
  • Cleaning protocols are being thoroughly advertised to ensure client safety. However, it has been evidenced that such protocols do not in actual fact effect people’s choice when booking accommodations. Pool size and overall villas appearance is more sought for rather than cleanliness and safety;
  • The biggest challenge shortlets have faced was due to their dependency on third companies such as Airbnb and Booking.com. These companies simply cancelled and refunded all bookings cancelled during the pandemic. However, when comparing to the situation of direct bookings, the latter would allow a chain of communication with the guest which most often led to a rebooking in 2021. Thus, no refunds were being given. His experience has shown that direct bookings should be promoted in the future.

 

Despite all the setbacks, the pandemic gave business and company owners proper insight. While they were shocked by the results during this pandemic, with little knowledge on how to proceed, leading to great losses, they will now be prepared for another possible hit on their profits as a result of the various initiatives they were “forced” to employ.