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EU tourism Southern Europe


Hotel arrivals

Malta has been losing traffic since August 2006, where total hotel arrivals reached a peak of 142,850. Same month 2007, arrivals were down to 138,112 (-3.3%), 2008 they decreased further to 135,994 (-1.6%), and in 2009 fell to 131,735 (-3.1% or by -7.8% since August 2006). 2010 can be expected to show yet another decrease for two main reasons:

  • The change from MTL to EUR which has raised prices and made Malta less price competitive.
  • The economic crisis with its negative impact on residual income.

The same trend is seen in Cyprus, Portugal and Spain. Italy, on the other hand, is demonstrating an increase which suggests that it may be snatching tourists away from the other four countries. Greece behaves irregularly. In order to combat the decline in tourism, the four countries must increase market expenditure aimed toward tourism and develop events that attract tourists.

Hotel arrivals yearly change

Malta shows a decline July 2008 to November 2009. December registers an increase. While this may suggest a change in tourist behavior, Eurostat series for Malta do not extend further which make that a questionable assumption. Italy, Portugal and Spain show a similar trend whereas Cyprus does not; tourism there is in serious shape at -20.7% as of December 2009.

Hotel arrivals 12-M moving average

The 12-month moving average spells bad news for Malta’s tourism sector. The 93,541 arrivals June 2009 are a far cry from the 104,049 same month prior year. Immediate action needs to be taken to turn this development around. The same situation is evident clear across Southern Europe.

There is reason to link it directly to the adoption of the EUR which raised prices and made this region of the world less attractive to tourists wanting to live in luxury at minimal cost. The rules of the Southern European tourist game have changed and the countries must change with it or find another source of revenue to offset the decline in tourism. If allowed to continue without an alternative source of income emerging, the economies (Italy is safe because of its industrial output) are bound to experience prolonged economic difficulties.

Hotel arrivals ratio

Measuring resident arrivals against total arrivals reveals that resident traffic is increasing (increase means less foreign traffic and less revenue arising from tourism). For Malta this ratio for August 2005 measured 6.2%, 2006 8.2%, 2007 7.8%, 2008 8.1% and 2009 11.2%. Cyprus shows a similar trend and also Portugal to some extent. Greece, Italy and Spain seem more stable with little change in the ratio between years. The rate for Malta is the lowest of the Southern European countries which could be a positive sign if the hotels are booked to capacity.

Hotel arrivals ratio 12-month average

The arrivals ratio presented as a 12-month moving average clearly illustrates the situation in Malta in terms of attracting foreign tourists. The rate has been moving steadily upward since October 2005 which is a bad sign unless it brings hotel capacity closer to maximum. In October 2004, the ratio was at 11.8%, in 2005 10.1%, 2006 12.9%, 2007 13.6%, 2008 12.6%, and 2009 15.7%. Same situation applies to the entire Southern European region. Cyprus behaves similarly as Malta, yet the increase is constantly upward.

Greece sees this ratio go from 53.5% December 2007 to 55.7% December 2009, Italy from 56.6% to 59.0% during the same period, Portugal 49.9% to 52.1% and Spain 58.5% to 59.3%. Malta has the best ratio in terms of residents versus foreigners, but it all boils down to hotel capacity. If capacity utilization is even among the Southern European countries, Malta is the winner despite the rise of the arrivals ratio. If capacity is below the Southern European average, however, there is trouble ahead.

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