Enlargement and tourism development

Tourism Minister Francis Zammit Dimech addresses last week’s technical seminar on ‘European integration in the era of the EU’s enlargement and the development of tourism’

Richard Rosser, chairman of the European Trade Union Committee on Tourism, once stated that: "Tourism is Europe's biggest industry, yet tourism is a sector that in Europe has been squeaking like a mouse for far too long. It now needs to roar like a lion."
EU institutions and many current and future member states do recognise that travel and tourism is an important sector for their economies. The tourism industry plays a crucial role in national, European and global economies and should be considered accordingly. Within the EU, it accounts for five per cent of GDP and generates eight million jobs. It is therefore undoubtedly a major industry which will become larger. In fact tourism is one of the industries which grows as global wealth increases. The wealthier the people, the more spare time they have and the more they are apt to travel. This fact gives the tourism sector scope to increase its potential. The World Tourism Organisation envisages a boom over the next twenty years which will lead to worldwide tourism more than doubling.
At the same time, tourism is a vulnerable sector, subject to external influences such as the global economy and safety. The effects of the terrorist attack of 11th of September 2001 on the Twin Towers in New York are still fresh in everybody’s memory. The conflict in the Middle East is another external influence which is having a profound effect on tourism to countries in the Mediterranean. In tourism, one can also witness an ever-changing competitive scenario with the constant development of new destinations for the tourist.
Tourism is one of the mainstays of the Maltese economy. In less than four decades it has grown from an almost invisible economic activity to the complex and noticeably large phenomenon it is today.
Malta is not any more merely a sun and beach destination. We are targeting niche markets that include English language schools, diving and cruise liner passengers. In 2002 about 60,000 visited Malta to take up English Language learning whilst the same number of passengers visited Malta for diving. The number of cruise passengers went up by 82,242 to 341,632 from 259,390 in 2001. Keeping in mind our 7000 years old history we are marketing Malta as a cultural destination particularly for the off-peak period.
A study commissioned by Government, measuring the industry’s impact on the national economy and the ensuing results, shows that tourism in Malta contributes 25 per cent to Gross Domestic Product, 22 per cent to Government revenue 28 per cent – equivalent to 40,000 – in employment terms. Gross earnings from tourism during 2002 amounted to Lm246.3 million, whilst earnings per capita in the twelve month period January – December 2002, earnings from tourism per capita stood at Lm217.20.
Tourism does not fit easily into any standardised national institutional framework. Measures taken by different ministries – transport, environment, interior, foreign affairs, public works, culture, consumer protection, health – can profoundly affect tourism outcomes.
Within the European Union, tourism policy and development of favourable general framework conditions are primarily a matter for each Member State. Co-operation on an EU-level is relevant in areas where we can add value by addressing them in a European context. Three areas have in fact been identified where EU action can add value to Member State tourism policy. These are:
• The improvement of a common statistical database – accurate knowledge of the industry is a precondition for benchmarking, for the exchange of views and of experience and for addressing strategic problems of the sector;
• initiating operational and focused benchmarking analyses in order to achieve a detailed understanding of tourism in the Member States and thereby developing quality definitions and indicators, by formulating a vision for sustainable tourism; and
• Strengthening the integration of tourism policy issues into related policies. Tourism is a sector of a transversal nature affected by numerous EU-policies and common efforts must often be focused on horizontal issues. European growth in the coming years to an increasing extent must derive from structural reforms and through the improvement of the general framework conditions for European citizens and businesses.
The latter point is currently at the centre of discussions taking place on an EU level. The argument is whether tourism should have a horizontal policy in its own right or whether tourism should be reinstated in the Treaty as one of the areas for supporting action, with the European Union playing a complementary role to that of the Member States. Following the first informal meeting of Ministers and high officials from the 25 EU Member States, held in Crete a fortnight ago, I would venture a guess to the effect that tourism, in the coming years, will begin to be regarded as a specific policy area within the enlarged European Union family. As Member of that family we certainly welcome the news.
Co-operation between the Member States of the European Union, both the current and the prospective ones, on this issue thus is and remains key to success. It is important that Member States work according to an open method of co-operation taking account of the principle of subsidiarity while encouraging the active participation of enterprises and economic and social players.
Malta already enjoys various EU benefits. As from 1 November 2002 the UK reduced its Passenger Departure Tax by 75 per cent placing Malta on a par with member states to compete on a level playing field with Spain, Greece, Italy and Portugal. Moreover we have gained a competitive edge over non-European destinations like Tunisia and Morocco. The Leonardo Programme funds 75 per cent of training courses, an advantage we already enjoy. Malta qualifies for EU assistance, equivalent to 75 per cent of the cost of road building, heritage and other projects that address infrastructural and environment deficiencies.
My predecessor, Michael Refalo, identified another area for common European action, that is the provision of protection against "the often commercially fatal effects of tour operator collapse" on the smaller firms that make up most of the tourism sector. Although existing national schemes do provide some protection to consumers, the hotel sector and its suppliers remain dangerously exposed - and merit a Europe-wide mechanism to respond to the "special conditions, such as differences in time and distance... and diverse business practices". I subscribe to his opinion and would like to submit this point for debate during this seminar.

The overall EU legal framework has a bearing on the tourism sector and influences the actions of both current and future members. The next enlargement will widen the scope of EU legislation to cover a larger geographic area. Such legislation as competition, including state assistance to industry, consumer protection, safety, transport and the environment will cover the tourism industry in 25 states – 28 if one were to include the members of the European Economic Area. The adoption of the environmental acquis communautaire will mean more environmentally-friendly and "green" destinations. Tourists in all 25 plus three countries will have the guarantee of the minimum protection which the European Union offers the consumer. The eventual adoption of the EURO will also render the comparison of costs between destinations much more easy, and will remove the costs and risks of different rates of exchange.
Membership in the European Union carries great benefits. The provisions on the free movement of persons and of the Schengen Agreement have resulted in easier cross-border traffic for EU citizens. These benefits have been supplemented by the introduction of the EURO. Countries outside the European Union, including Malta, are thus at a clear competitive disadvantage. Malta looks forward to benefiting in full from these rewards of EU Membership.
EU transport policies are also a major factor in the increasing interdependence between EU Member States in the context of tourism. Transport and tourism are strongly interlinked and efficient transport links are essential for any tourist destination. There is an increasing need for security and an integrated transport network with convenient transfers between different modes of transport in order to satisfy the tourist's expectations. This is where EU transport policy plays an important role. The measures liberalising the air travel sector and the implementation of the third package leads to more links, to destinations which were not hitherto very accessible and less expense. This can only be of benefit to tourism.
The use of structural funds also offers new opportunities for the sector – the "product" can be improved both through direct funding and through funding which goes to other areas but has a bearing on the sector. Better roads also imply an upgrading of the tourism product. In addition, the tourism sector already has and will continue to have the opportunity to participate in the training and retraining programmes offered by the Union. Accession in the European Union means that participation in such programmes will be free of charge. Other benefits include the removal of restrictions concerning the purchase of chartered flights; more competition will mean better prices and products for all persons purchasing flights. Accession in the EU will also be, in itself, an attraction for Foreign Direct Investment.
Today we speak of sustainable tourism, tourism that is economically and socially viable without detracting from the environment and local culture. Sustainability means business and economic success; environmental containment, preservation and development; and social responsibility. According to the European Commission, the right pathway to the sustainability of European tourism is through the reinforcement of the existing framework for action and making the best use of it.
As island states, Malta and Cyprus face a different tourism scenario from the rest of the accession countries. To quote Agenda 21 (Chapter 17):
"islands constitute a special case, both for the environment and for development, and they present very specific problems in the planning of sustainable development. They tend to be ecologically fragile and vulnerable". On the other hand, their small individual size, their limited resources, geographical dispersion and their isolation from markets place them at an economic disadvantage and prevent them from achieving economies of scale. "Geographic isolation means they have a relatively large number of singular species of flora and fauna, so they possess a very high proportion of the world’s biodiversity. They also have rich and diverse cultures that are specially adapted to the island environment".
According to the international arrivals data supplied by the World Tourism Organisation, islands, as a whole, can be considered the world’s second leading tourist destination, behind the block formed by historic cities.
To get an idea of the importance of island tourism, if we compare usual island tourist densities within the European Union we find densities reaching 150 beds per square kilometre, higher in many cases than the density in many populated areas of the continent. In these conditions, competition for space emerges as a key factor in tourism planning.
EU action in the tourism sector must take into consideration the specificity of island destinations.