The impact of tourism on the economy
by Leslie Vella, Director Corporate Affairs and Marie-Louise Mangion, Research & Information Manager
The impact of tourism
Tourism is not a given - it is an industry which has to be directed and managed in the national interest.
Tourism in Malta is spread throughout the island - the whole island is a resort.
Tourism's impact is spread throughout.
Tourism activity has an impact on:
- tourism superstructure (for example appearance, quality of service)
- the economy
- society and its culture
- the state of the environment
- the image of the destination
Proper information is required in order to be able to plan for a sustainable industry which has a life beyond this generation.
Collated into two main areas:
- economic contribution
- overall scenario
Two main studies have been commissioned by the Ministry for Tourism:
- The Economic Impact Study
- The Carrying Capacity Assessment Study
These studies will:
- provide direction for tourism policy
- act as a basis for decisions related to product planning, marketing, human resources and support services
The Economic Impact Study was finalised in June 1999. Currently, work is in progress to update the study for 1999.
The Carrying Capacity Assessment has now surpassed the data gathering stage and is in the analysis stage which will direct the process for formulating the possible development scenarios.
Given the industry's complexity it has become necessary to break down the industry into its main components rather than evaluate it as a whole.
It is also important to evaluate the economic contribution of the main geographical markets and market segments.
Why a Tourism Economic Impact Study?
- To lead to an evaluation of tourism on the basis of its wider interaction with the rest of the economy
- An industry like tourism needs to be measured beyond the direct level. This can only be undertaken through an economic impact study.
- The ultimate scope of carrying out a tourism economic impact study is therefore to provide a novel approach towards evaluating the extent of the tourism industry in the Maltese islands.
- As a result it is hoped that the Maltese tourism industry will start to be evaluated from the new angles and vantage points thus created.
The study will give a contribution to new marketing opportunities and growth prospects.
It will help in providing investments which yield more.
It is an essential tool in the pre-accession negotiations with the European Union
It provides a novel approach towards evaluating tourism nationalities and market segments through the application of tools such as input/output methodology and tourism multipliers.
The impact of tourism on
the Maltese economy
A few results:
Tourism earnings model
Tourism Industry Purposes
- Aviation related revenue Lm70.35m
- Handling agents (T.O. comm.) Lm3.30 million
- Other services rendered to tour operators Lm2.65 million
- Accommodation Lm125.98 million
- Tourists' personal expenditure Lm117.21 million
- Total tourism expenditure Lm319.49 million
The sectoral analysis provided for a breakdown of 1998 tourism revenues covering the following broad categories:
- Aviation related
- Passenger handling/Resort transfer
- Accommodation
- Catering (food and beverage)
- Domestic transport
- Recreation
- Shopping
- Other
The following subdivisions were forthcoming from the data:
- Accommodation Lm125.98m
Pre-paid Lm115.28m
In Malta Lm10.78m
- Catering Lm53.56m
In accommodation Lm9.88m
In restaurants Lm24.81m
Take-aways Lm10.84m
Groceries Lm8.04m
Domestic transport Lm14.30m
- Ferry crossings Lm2.50m
- Vehicle hire Lm7.60m
- Taxi rental Lm1.57m
- Public transport Lm2.54m
Recreation Lm19.54m
- Cultural Lm8.89m
- Popular entertainment Lm3.82m
- Sports activities Lm3.01m
- Other recreation Lm3.82m
Shopping Lm26.72m
- Basic necessities Lm3.74m
- Souvenirs/gifts/dutyfree Lm17.64m
- Other shopping Lm5.34m
Other revenue Lm3.09m
Total 1998 revenue Lm319.49m
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