With the tourist season in full swing, the debate over the type of tourists arriving in Malta, and their impact on Malta’s economy, has once again hit the front pages.
Tony Zahra, the president of the Malta Hotels and Restaurants Association, one of Malta’s main tourism lobby groups, was the first to wade into the discussion, warning that Malta needs to look beyond low-spending concertgoers and cruise liner visitors in favour of higher-spending visitors.
Tourism minister Clayton Bartolo was quick to reply. While agreeing with Zahra’s broader point on the need to attract higher-spending tourists, Bartolo insisted that Malta is “witnessing sustainable tourism with growth that we can maintain”
“While tourist numbers may not always increase, what matters most is the rise in expenditure,” he added, pointing to an expected tourism expenditure of €3 billion.
Will tourists really spend €3 billion in Malta this year?
Time will tell, but that figure doesn’t appear far-fetched.
So far this year, official data shows that tourists in Malta spent a grand total of almost €1.3 billion.
While this is a little short of half the €3 billion projected by Bartolo, this data stops in June, just before the tourist peak throughout the summer months, when tourist expenditure is expected to ramp up.
Just by way of comparison, tourists had spent roughly €250m less by this point last year, with the total spend by the end of the year eventually reaching €2.7b.
Unsurprisingly, much of the increase is driven by the fact that tourist numbers are once again on the rise.
Malta had welcomed some 1.3 million tourists in the first six months of 2023, on its way to topping the 3 million figure for the first time in its history.
This year Malta has already raced ahead, welcoming some 300,000 more tourists than it did in the first half of last year.
But how much is each tourist spending?
Zahra might argue that all this is beside the point. After all, he didn’t say that Malta isn’t earning enough money from tourism, but rather he argued that the industry hasn’t yet managed to squeeze more money out of each tourist to earn just as much without seeing arrival numbers climb up.
This is broadly true.
The average spend per tourist hasn’t risen in any meaningful way over the past decade, remaining a little below the €900 mark since 2016 (with the notable exception of the pandemic-stricken 2020, when it plummeted to under €700).
If anything, last year’s average spend of €898 was a little lower than that during 2015, when it reached €919.
This gets even starker once you take inflation into account.
In real terms, the €919 that each tourist spent back in 2015 is the equivalent of €1,160 today. In practice, this means that tourists in 2023 spent the equivalent of almost €250 less than they did back in 2015, once inflation is factored in.
So not only are tourists barely spending any more than they did a decade ago on paper, but the impact of inflation means that local businesses are ultimately seeing less of that money than they once did.
What about so far in 2024?
Needless to say, we’ll have to wait until next year to get the full picture, but the first half of the year seems to be following a similar pattern to its predecessors.
Each tourist who visited Malta between January and June spent €812, on average, a few cups of coffee worth more than last year’s €804, but below the €822 recorded in the first half of 2015 and the high of €862 at the beginning of 2021.
Again, adjusting these figures for inflation paints a slightly bleaker picture. This year’s €812 is the lowest across the decade, except for 2020, when the tourism industry ground to a halt.
What are tourists spending money on?
So far this year, the only noteworthy increase appears to be on package deals, where travel, accommodation and other outings are all bundled into a single deal. These have jumped from an average of €706 last year to a little over €740 in the first half of 2024.
For the more adventurous solo travellers, expenditure has remained roughly identical to what it was a year ago. The average tourist spends €189 on air or sea travel (€1 more than they did last year), while spend on accommodation has actually dipped slightly from €282 to €275.
“Other expenditure” – a catch-all term that includes everything from museum tickets to shopping and souvenirs – has remained steady at €300.
Verdict
Tourism spend will likely hit €3b by the end of the year, but this is mostly down to an ever-growing number of tourist arrivals.
The average spend of each tourist visiting Malta has remained largely unchanged over the past decade and was actually a little higher in 2015 than it was last year.
Once the average spend figures are adjusted for inflation, this becomes even more stark, with today’s average spend working out to be the equivalent of almost €250 less than in 2015.
Chris Sant Fournier
Economy, Society, Uncategorized
Copyright 2024. Times of Malta
Originally published here.
