Value of tourism


Tourism is vital for many countries particularly for island nation states. According to Kotler, Bowe, and Makens (1996) "tourism creates direct and indirect jobs in hotels, restaurants, consulting, transportation and training; it increases tax revenues; and it helps the exporting of local products." This is beneficial for businesses especially those in the service sector as it brings about large incomes and higher employment opportunities.[1]

Tourism is one of the major blocks of the Maltese economy, especially since Malta is an Island Microstate.[2] Today, even though new services are being introduced, for instance e-Banking and e-Government, the value of tourism is still very important. Economic sectors such as the entertainment industry which includes hotels, bars and restaurants are largely driven by tourism. This factor drives Malta in creating a unique identity and also in portraying a positive image. This image is then directed towards potential tourists by using intensive nation branding.

Dr Jon P. Mitchell (as cited in Briguglio, Butler, Harrison, & Filho, 1996, p. 202) describes how in 1958 a Maltese tourist board was set up in order to promote the islands as a holiday destination. After the Independence in 1964, the Government started to allocate funds for tourism developments. During that period until the 1980s, tourism grew exponentially and according to Smith (1978) Malta was marketing for recreational tourism termed as the 'four Ss' of Sand, Sea, Sun and Sex. Early copies of 'Malta This Month', the in-flight magazine of Air Malta (set up in 1973), depicts the nation as the 'in' place to be, where you can 'drink, dine and dance' among visiting film and television stars. Malta This Month (1974) quotes "Malta is the place for sun-worshippers wanting peaceful, friendly surroundings. It is a treasure trove of art, history and stark beauty..." Malta was portrayed in terms of entertainment perhaps with a little heritage thrown in.

The steady rise in tourism between the 1960s and 1980s proved that the promotion policy at that time succeeded (L. Briguglio & M. Briguglio, 1999, p. 4). (Put in Appendix)

According to Dr Jon P. Mitchell (as cited by Briguglio et al, 1996, p. 204) by 1975 the number visitors exceeded the total population, thus confirming that Malta is a mass tourist market. Both the Nationalist Party (PN) and the Labour Party (PL) requested branding Malta in order to increase 'quality' tourism and diversify into the cultural and heritage market. This reduces the burden of seasonality. Dr Mitchell (1996) continues that in 1986, the PN stated that development was needed to characterize the uniqueness of the country, particularly focusing on the historical, archeological and artistic heritage.

1992 saw plans to introduce a Maltese 'Culture Card' that would entitle the users discount access to museums and historical sites. This card aimed in increasing the yearly spread of tourism and in raising the status, hence increasing the spending power of tourists. Briguglio et al. (1996) explains that this showed slow but steady success in the 1990s. As an evidence of this, there was a 2% increase in tourism in winter, and 5 star hotels showed a significant growth in their market share. This was later enhanced by the Government, allowing only 4 and 5 star hotel developments and later on only 5 star hotels developments. In 1988 there was also the set up of the Institute of Tourism Studies to enhance and improve tourism services. This led the National Tourism Organization of Malta (NTOM), now known as Malta Tourism Authority (MTA), to brand Malta as a tourist destination for those who are interested in more than just swimming and the entertaining night life of the island, like geography, history, people and culture. The plan was to promote culture and learning (Briguglio et al., 1996, p. 205).

According to MacDonald (2004), the MTA annual conference, held on the 25th of November 2004, focused on product and branding. It was said that Malta needed to adopt its competitors' strategy in order to create a brand image. MTA's chairman, at that time Mr. Chris Grech together with tourism experts, discussed brand development extensively with Deloitte's consultant. This led to extensive discussions throughout 2005, and there had been reshuffles within the MTA. This was done to attain the best personnel within the board, and to enable success in the Brand Malta campaign. This campaign was supported by the National Reform Programme 2005 - 2008, the National Strategic Reference 2007 - 2013, the Pre Budget 2006, "A better Quality of Life 2006 - 2010" and particularly by the Tourism Policy for the Maltese Islands 2007 - 2011.

The Brand Malta campaign is very particular and has left mixed feelings and arguments about it. This campaign, which was expected to run for three or four years, only lasted for a few months after it had been implemented in mid 2006. An interesting point is that this High Agenda campaign was to be a Governmental project, with the MTA and the Government being the main owners; however private stakeholders were also involved. The private sector was lobbying with the Government in order to find the best solution for success and for the benefit of the rational interest of the private shareholders and the country itself.

The scope behind this dissertation is to;

  • Understand the Brand Malta campaign, by defining its aims and objectives
  • Examine how this campaign was implemented and by whom
  • Find its positive and/or negative consequences and outcomes
  • Explore what lessons have been learnt and analyse later policy initiatives in the field of nation branding.

Having said that the campaign was discontinued, the Government still considers tourism as a main part of the economy. As a matter of fact the previous Minister for Tourism and Culture, Zammit Dimech (2006) states the following;

The Government is investing a good percentage of the European Regional Development Funds and the European Social Funds 2007-2013 towards tourism product development. Out of a billion euro 120 million euro are to be invested in tourism. In its call for proposals for 180 million worth of projects under Cohesion Policy 2007-2013, 80 million are earmarked for product development, niche market development and branding (p. 3).

Importance of tourism in the Maltese Economy

Eurostat (2008):

Europe is the most important tourism region, both as a destination and as a source. In spite of the steady fall in its market share over the last ten years, as a consequence of the dramatic growth of very dynamic regions like Asia (especially South Asia), Europe's tourism flow still increased in absolute terms from 1995 to 2000 and then fluctuated in the following six years. Europe nonetheless continues to play a central role in the global tourism market (p.3).

The area of Malta is 316km2 (NSO) and that of the EU-27 is 4,324,782km2 (Eurostat). Thus Malta occupies only approx. 0.007% of the Eu-27 countries land. According to the NSO (2008), the estimated population of Malta is around 413,609 and according to Eurostat (2010) which estimates the EU-27 population, is of 501,259,840. Thus Malta has only approx. 0.008% of the EU-27 population.

Direct Competitors: Malta and Cyprus

Malta and Cyprus are considered by tourism experts such as the Eurostat and the United Nations World Tourism Organisation (UNWTO) as direct competitors. They are situated in the Mediterranean Sea, and both islands are relatively small, particularly Malta as it is a Microstate.[3] Both islands gained independency from the British in the 1960s, joined the EU in 2004 and adopted the Euro currency in 2008.

Certainly, both islands consider themselves to be, first and foremost, sun, sea and sand destinations, and are also rich in history and culture. In a sample conducted by Zarb (2007), of which the purpose of the dissertation was "The social impact of Tourism in Small Island States", respondents from both Malta and Cyprus were studied. They agreed on the factors that have moulded the attitudes of the people towards the tourism industry; i.e. hospitality and courtesy, and fairness in trading and cleanliness. These points might demonstrate that the assets found in such countries, may result in advantages over the larger countries.

According to the Eurostat (2008), any European country that attains a ratio of 7.5 nights per resident, gives proof of the high demand the country faces in relation to its population. In 2006, the highest nights per resident ratio was in Cyprus and Malta, 18.8 and 18.3 respectively (p. 7). More detail can be seen in table 1.

Malta in comparison to the EU-27 Members

Eurostat (2008) states, "In 2004 and 2005 the emerging European countries enjoyed their strongest growth since the beginning of the transition phase. This expansion was led by the Baltic States (Estonia, Latvia and Lithuania) and southern/south-eastern Europe (Bulgaria, Cyprus, Malta and Romania) (p. 14).

Eurostat classifies the EU-27 countries in the three classifications.

  1. Mainly origin countries: These are countries which have more outbound tourism than inbound tourism.
  2. Origin-destination countries: These have relatively the same inbound tourism as outbound tourism.
  3. Mainly destination countries: Countries that have more inbound tourism than outbound tourism. Malta is classified in this section together with 11 other countries, 2 of which are direct competitors of Malta, Greece and Cyprus.[4]

Malta is an archipelago[5] consisting of three inhabited islands Malta, Gozo and Comino, and over 15 uninhabited minor islands (or rocks). The Maltese islands benefit from internal tourism especially in the months of summer. One particular month is August when there is the famous feast of St. Mary (15th August) celebrated in Victoria Gozo. The following table shows tourists' trends of travelling from Malta to Gozo.

Gozo and Comino have different characteristics from those of Malta. As a matter of fact, Gozo and Comino are expected to be advertised as ecological and agro-tourism islands. As an ecological island, Gozo is given importance in the Government's Vision 2015 and in the Pre Budgets 2005 - 2010. It has been the main focus especially in the Pre Budgets 2009, "Together for a Sustainable Future", and 2010, "Growth, Jobs and Social Cohesion."

Each EU-27 country has its own benefits, and its main tourism market attractions. All EU-27 countries are unique, however they also have similarities. In the case of Malta, it is mainly a destination of international tourism. It attracts tourism for various factors; it could be for its climate, history or beaches among other markets.

Eurostat (2008) studied that in 2006, Malta had 0.7% of the total international tourism nights in the area of EU-27, and it had only 0.2% of the EU-27 total international receipts. Although this seems to be very small, if the size of the population and the area of Malta were to be considered when compared to other EU-27 countries, then the percentage is quite substantial. It states that the "international tourism contributes significantly to the local economy." In 2006, international tourism receipts accounted to 12.1% of the Maltese total GDP.

The main tourism markets in Malta in 2006 came from the United Kingdom which posed over 42% of the market. Ranking 2nd was Germany with nearly 12% of the market. They were followed by Italy, France, the Netherlands and Belgium.

Maltese Tourism Industry Employment

Table 3 above proves that tourism does not only form a big part of the Maltese GDP but it also employs a big percentage of the whole employed population. The 8.2% of employees represents only the population that is working in hotels and restaurants. One must not forget though, that the tourism industry might include other sectors such as transport which consists of; tours and cruises, renting activities, construction and other niche markets.

Brief Chapter's Background

This chapter continues by identifying and explaining the research methodology carried out. In order to understand better the issue being studied, the writer used both primary and secondary research sources. As regards to some interviews which were carried out directly to the involved personnel within the MTA board at that time, their identity will not be citied, mainly because it was made clear by the people interviewed that they do not want their name to be mentioned.

In the second chapter the writer will be focusing largely on the theory related to; branding and Marketing tourism commodities to Island Microstates and Policy implementation. These theories were researched from various books, reports and journals. The writer shows that it is sometimes difficult to come up with just one definition of public policy in this field of analysis.

Chapter 3 specifically deals with the case, Brand Malta campaign. It first starts by explaining the foundations of Brand Malta and defining its scope. Brand Malta's mechanism and stakeholders will be explained. Finally, there will be a description of how it was implemented.

Chapter 4 presents the reader with the aftermath of the Brand Malta campaign. Perceptions of the public and the key stakeholders will be presented, either by interviews or press cuttings. Any positive or negative effects or opinions will be explained. There will also be an examination of the 'ripple effects' that are still evident after the campaign.

Chapter 5 will put forward the lessons learnt from policy formulation.

The writer will conclude this thesis by putting forward his general conclusions and recommendations. In order to sum everything up the author will provide a synthesis of what has been studied. To be done later

Research Methodology

The basis of this dissertation focuses on both primary and secondary data.[6] Due to the fact that this dissertation includes a case study of a national campaign that has never been studied in depth before, the use of primary data is crucial.

The secondary data reviewed in this thesis includes academic literature, reports, press cuttings, parliamentary debates on the campaign, and books. The major literatures behind this dissertation include articles related to the campaign from various newspapers throughout the years 2004 to 2007 and some more recent articles published in 2009. Another major source used was the parliamentary debates at that time, which enabled the writer to understand what was happening in the political sphere. Already available interviews were used, especially with those personnel directly involved with the MTA and with private businesses.

The sources which were used for primary data were semi-structured and formal interviews. These were carried out to some of the board members of the MTA at that time and also to other personnel that were directly involved. Ethical considerations were followed as some interviewees preferred that their name would not be mentioned, and as a result their name was not cited. Semi-structured interviews were preferred over other methods as they allowed the author to be flexible and ask or change questions while the interview evolved.

  1. These services include; the food and drink industry; the hospitality services embracing hotels, resorts and apartments; the entertainment industry including clubs, cinemas, casinos and malls; travel and tour agencies along with Museums; transportation industries made up of airlines, buses, taxis, cruise ships and, traditional transport such as carriages famously known as "Karozzin" in Malta; and other niche markets.
  2. A Microstate is a self-governing state that has an area less than 1000km2 and a population less than one million (Sidiropoulos, 2009).
  3. Although Cyprus does not qualify as a microstate entirely by the Commonwealth Micro-state index it has certain features of a microstate, such as their population is less than a million.
  4. Inbound tourism, is the number of nights spent by non-resident tourists in the countries, and outbound tourism is the number of nights by resident tourists abroad,
  5. An archipelago is a chain or cluster of islands that are formed tectonically (Wikipedia, 2010).
  6. Secondary data is the already available data, and on the other hand primary data is the data not available.

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