 20 - 26 December 2000 |
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Businesses fear Frosch repercussions
The President of the Malta Hotels and Restaurants’ Association might have lauded his members yesterday for putting up a united front against Frosch Touristik’s proposal to have its pre-contracted rates reviewed, but whether that feeling of solidarity will be expressed throughout the rest of the island is far from guaranteed. In fact, as the Frosch issue hots up, it is likely that each sector will gear up to fight its own corner, in a battle that may well get considerably heated. The MHRA is sticking to its guns, saying that in principle, it was not prepared to renegotiate the contract with Frosch, especially since it believes that the German market did not indicate the need for such a downward revision. But operators in other lines of business who will be affected indirectly by a drop in tourism, such as shops, bars and restaurants, have expressed a fear of the extent of the damage that will be done if Frosch begin downsizing their operations to Malta. They pointed out that the industry is already feeling the fact that the supply side in the hotel business is growing and the number of beds is still on the rise. "Because of this, we have a great fear of a drop in the number of incoming tourists," one businessman said. The key issue may well be whether businesses on the periphery will stand behind the MHRA, which is unlikely to budge on the proposed revision of the contract. Other sectors may well feel the hoteliers should consider a compromise with Frosch rather than risk losing out. Warning bells were sounded earlier about possible scenarios like that of Frosch, when former MHRA President, Joe Preca, spoke about the pattern of take-overs in the tour operator industry. "It is clear that package travel will be in the hands of two or maximum three tour operators," he had told The Business Times. "This development is dangerous in many ways, since not only are the operators in a position to dictate prices that hotels charge, but they also control the volume they want to send to a particular destination. "This could have an adverse effect on Malta, especially bearing in mind that the latest take-overs involved Thomson and Frosch Touristik, both of whom happen to be the largest suppliers of tourists to our Islands from our two main core markets – the UK and Germany." Speaking at the presentation of the Revenue and Occupancy Survey for July to September 2000 yesterday, the new President of the Malta Hotels and Restaurants Association, Anthony Chircop, warned that Frosch will be reducing their summer programme drastically from 80,000 to 40,000 people or less. Mr Chircop said that the situation could get worse if a solution was not found, but also stressed that although he hoped agreement could be reached, it must be one that is satisfactory for his members. "As an Association, our first interest lies with the hoteliers," he said, "however, I must stress that this is not a battle against a particular tour operator." Mr Chircop said the MHRA had called for a meeting with those hotels which would be directly affected by the development, and with the Malta Tourism Authority. It had also planned for a delegation to fly to Germany, but this had been postponed when it became known that one of the Directors of Frosch would be coming to Malta to discuss offers and proposals. Mr Chircop said that following an MHRA meeting with the Director, an urgent meeting was called with the Association’s members and an agreement was reached that there was no point in re-opening these negotiations. He expressed his satisfaction that the hoteliers were sufficiently professional and responsible to put up a united front, but added that this did not, however, solve the problems. Mr Chircop warned that if the situation continued in the same direction, the arrivals from Germany would decrease. "This will not only affect arrivals from Germany, but also those from other places," he said. He called for immediate and drastic action, saying that otherwise, there would be "very bad news for the summer" for the tourism industry, which would also affect the overall economy of the country. | |||||||
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