Hotelier disputes Best debts

Salina, 29/12/06 - Destination management company The Best of Malta did not go belly up with debts of Lm75,000, says managing director of Island Hotels Group Winston Zahra.

The Best of Malta went under with debts of "Lm163,578", Zahra tells Island Travel Trader Online (see The Best of Malta goes sour).

Zahra says he is precise about the figure because "we had a meeting of the creditors and the auditors prepared a list, and the creditors' list shows that he [former Best of Malta managing director Joe Diacono] left the company with debts of Lm163,578".

Two creditors' meetings have been held so far, the first on 8 November - a fortnight after the company went into liquidation.

At the first meeting financials for 2005 were presented and, 15 days later - at a second meeting, also held at the Victoria Hotel in Sliema - "up to date accounts were presented, and these show that there are outstanding figures to creditors of Lm163,578".

The audited figures also show, according to Zahra, that The Best of Malta, has monies due to it, "but it's minimal, very small amounts". Bottom line, the company has assets "of around 15,000", insufficient to cover its debts. Moreover, Zahra insists that The Best of Malta was insolvent "from day one", and should have ceased operating a long time ago.

Meantime, the largest sums owed by The Best of Malta are to hotels, and the company with the highest receivables is Island Caterers, the outside catering arm of the Island Hotels Group. "He owes us Lm35,866", says Winston Zahra, mostly for catering but also for some accommodation. A Best of Malta list of payables, however, claims the company owes Lm31,479 to Island Caterers.

The second largest creditor, and also a hotel group, is allegedly due Lm19,890, although The Best's creditors' list show it owing Lm18,912.

Salina-headquartered Island Hotels Group plans to take legal action in a bid to recover its dues: "I am taking action, that will come out very shortly", Zahra tells Island Travel Trader Online. And adds: "I am discussing with our lawyers the next steps for our company to retrieve what is owed to us".

How much does the Island Hotels Group realistically expect to recover?

"It depends on Diacono's personal liabilities. I am maintaining that he should have stopped trading as a director - as a director he's got responsibilities. And since he was insolvent he should have declared himself as such, and not carry on mounting debts", says Zahra.

Air Malta launches January seat sale

Luqa, 29/12/06 - Hot on the heels of its two most recent winter sale campaigns - Spread Your Arms and Fly and Spread Your Arms and Fly Too in September and October - Air Malta has just launched a January seat sale. Thirty-one destinations are now being offered starting from Lm16 one-way (excluding taxes).

"Both our previous seat sale campaigns have produced an outstanding response from the public. This generated excellent results for us and increased our passenger figures by 11 per cent, or 16,000, in November and December alone, over the same period last year. Following this strong showing it is expected that this January sale will continue to enhance the airline passenger figures in the coming months", says Brock Friesen, KM's chief officer commercial and strategic planning.

Friesen added: "Through our January sale we are once again offering an unbeatable travel opportunity to both the Maltese and to incoming tourists, reaffirming our commitment to the local tourism industry. Through such sales our customers are being offered low fares without having to compromise on our good full service treatment".

The January sale is being offered to the following: Amsterdam, Athens, Berlin, Birmingham, Bristol, Brussels, Budapest, Casablanca, Dublin, Düsseldorf, East Midlands, Frankfurt, Glasgow, Hamburg, Istanbul, London Gatwick, London Heathrow, London Stansted, Manchester, Milan, Moscow, Munich, Newcastle, Oslo, Paris, Reggio Calabria, Rome, Sofia, Stockholm, Vienna and Zurich.

A substantial number of seats are on offer for travel from 9 January to 9 February. Tickets will be available for sale until 31 January.

The Best of Malta goes sour

Mosta, 21/12/06 - After just six years in operation, The Best of Malta - the destination management company set up by Joe Diacono - has gone bust with debts of Lm75,000.

"After having built it over the years, closing the company was one of the hardest decisions of my life", Diacono tells Island Travel Trader Online.

"I was let down by two foreign companies", explains Diacono. "We represented Catania-based Alsatours and they closed down owing us money. Another Sicilian operator, Garmon Viaggi, failed to pay us as well".

Cash flow is a perennial problem in Malta, particularly in the tourism industry. Yet after a successful 2005, Diacono felt that 2006 would be equally prosperous; it was not.

"2005 was the best year for the company, we had a turnover of nearly Lm500,000 and we made a profit", says Diacono, "and we knew 2006 was going to be tough, but we certainly did not expect such a steep downturn in the industry.

"I kept hoping the situation would right itself, but it didn't. And our turnover this year dropped to some Lm30,000".

The company, meantime, appointed a law firm to recover dues from the Sicilian operators, but this was expensive and there was no return. And, according to Diacono, his bank was not sympathetic and refused to extend his company's overdraft facility.

"I kept hoping the situation would improve, but it did not", sighs Joe Diacono. And on 24 October he called it a day and closed his Attard office for the last time.

The Best of Malta went bankrupt with debts of Lm75,000; the largest sums due to hotels, but several smaller ancillary service suppliers have also been hit.

Since the closure, a liquidator has been appointed and two creditors' meetings have been held at the Victoria Hotel in Sliema.

"What irks me most", says Diacono, "is that some creditors think I pocketed the money. I did not, I was left with nothing.

"I've gone to hell and back, and had it not been for the love and support of my family and my faith in God, I don't think I would have been able to go on", he adds.

Today, Joe Diacono is working for the Arrigo Group in Sliema. "Life has come full circle, I started my career in the travel business with the Arrigo Group in 1979, and here I am again.

November cruise traffic up 15 points

Valletta, 21/12/06 - Total cruise passenger traffic rose by 4,703 in November compared to the same month last year, "reflecting passenger departures - persons travelling in transit and those embarking from Malta - and passenger landings in Malta", says the National Statistics Office,

In November there was a 14.5 per cent increase in passengers travelling in transit, with major increases from Italy, France and the UK.

Embarkations from Malta decreased by 98 people when compared to November 2005, and passenger landings decreased by 76, in part reflecting the drop in embarkations.

Meanwhile, in the first 11 months of 2006 cruise passenger traffic in Malta rose by 29.2 per cent over the corresponding period in 2005.

Passenger departures increased by 28.3 per cent, mainly reflecting an increase in passengers in transit of 81,501. For the most part this increase was reflected in passengers residing in Italy, the United Kingdom, the United States and Germany.

Embarkations from Malta went up by 4,606 persons during the period.

Passenger landings increased by 70.6 per cent during the period under review. The increase in embarkations was partly reflected in higher landings by Maltese passengers, although landings by persons residing in the United Kingdom rose significantly as well.

A total of 350 liners called at the Grand harbour in the first 11 months of 2006.

Malta named the world's second safest destination

Monte Carlo, 20/12/06 - Malta ranks as one of the top five locations for safety in the world, according to American travel writer Laura McKenzie.

In her report McKenzie says of the Mediterranean holiday islands: "In Malta there is no such thing as a dark and uninviting alley, while the police force is one of the oldest in the world".

The report also praises New Zealand, Switzerland and Singapore as safe destinations.

Top was Monaco, with one police officer for every 100 residents and 24-hour CCTV coverage of the entire principality.

Commenting on the report, UK-based online travel agent and estate agent Yourmalta was not surprised that Malta reached Mckenzie's top five safest locations, nor that Monaco was top.

"Malta has her problems with the state of the roads and some other infrastructure, but when it comes to the people it's doubtful if you will find a friendlier more helpful island in the Mediterranean. This report from Ms McKenzie has come at around the same time as another survey showing that Malta is one of the best places in the world for retiring to".

Commenting on Monaco, who just beat Malta to top spot for safe destinations, YourMalta say that the reasons for moving to Malta and Monaco are very different.

"Monaco is for millionaires and billionaires, who often choose to live there because of the zero income tax. Malta is a low tax island and has her share of millionaires, but Monaco needs the security and does it well because it's what the wealthy expect - and they get it".

Three star hotels see red summer

Sliema, 20/12/06 - To put it mildly, summer 2006 was a disaster. Tourist arrivals for the critical Q3 were 30,000 below last year, bringing the year-to-date drop in arrivals up to 41,000, or 4.4 per cent down on 2005.

A lengthening of the average stay partially mitigated the negative impact of the lower number of arrivals, resulting in the number of guest nights being 2.1 per cent down for the quarter and 2.9 points down on a year-to-date basis.

Cumulatively France, Germany and the United Kingdom produced 50,000 fewer tourists between July and September than in summer 2005. The poor results from these core source markets conditioned the overall results for the quarter and not even the strong showings by Italy, the Benelux, Scandinavia and Russia were enough to reverse the situation.

Recently elected Malta Hotels and Restaurants Association (MHRA) president Josef Formosa Gauci said the islands "just cannot register such losses from their core markets, and all stakeholders should endeavour to work more closely together in addressing the challenges being faced".

He was speaking at the presentation of the MHRA's quarterly hotel survey prepared by Deloitte.

Continuing, Formosa Gauci said "focused marketing initiatives directed at our core markets and clients, coupled with a balanced and appropriate airline capacity strategy would reverse the negative trends and bring an increase in the level of arrivals.

"Early indications are that the long awaited introduction of low cost carriers from the end of October has started to contribute to the halting of this decline, although a great deal of work remains to be done to bring the tourism industry back on to a strong footing".

Meantime, the three star hotel sector was once again the biggest loser during the summer months of July to September. Against a backdrop of plummeting tourist numbers and an increasingly evident trend of travellers opting for higher category accommodation, three star hotels are finding it increasingly difficult to hold on to market share. Over summer three star hotels registered an 11.1 per cent drop in occupancy levels that has contributed to year-to-date occupancy levels falling to 16.6 points lower than last year.

Notwithstanding the 13.7 per cent increase in the number of guest nights generated by the five star category, the increased number of hotels registered a 7.7 per cent decrease in occupancy levels. Year-to-date occupancy levels remain 3.4 per cent lower than last year.

Guest night generation in the four star category was marginally down on summer 2005 and the increase in room supply was the catalyst of a 2.8 per cent drop in occupancy levels for the quarter. Occupancy levels on a year-to-date basis were 4.2 per cent below last year.

Achieved occupancy levels in four and three star hotels were boosted by a sharp increase in the number of students opting for hotel accommodation, which represented 10 and 12 per cent of total summer business respectively.

On a positive note room rates continued to increase in all three categories and average achieved room rate (AARR) is up on both a quarterly and year-to-date basis. In the four star category, the 9.5 per cent increase in AARR more than made up for the decrease in occupancy and enabled the category to register an improvement in achieved Gross Operating Profit (GOP).

In the five star category the drop in occupancy was greater than the 4.9 point improvement in achieved room rate, resulting in a decline in GOP of 4.6 percentile points.

The 2.4 per cent rate improvement was a "far cry" of what was needed to make up for the sharp decline in arrivals and guest night generation by three star hotels. Profitability for this category fell by just under 20 per cent for the quarter and 35.5 points on a year-to-date basis.

Formosa Gauci stressed that "the performance of the three star hotels has reached a very precarious situation and unless they register a significant turnaround, Malta and Gozo will have to face up to the challenging prospect of an increasing number of hotel closures in this category". (As a matter of fact, there are only two three star properties in Gozo.)

The MHRA, meanwhile, believes that the implementation of the recently launched national plan for tourism "needs to be given the utmost priority from 1 January 2007".

"The plan", said Formosa Gauci, "needs to be implemented holistically and with an absolute sense of urgency. Enough time has been wasted, and we now need to ensure that everything possible is done to turn the situation around and ensure the country yields the benefits of a growing tourism industry in the future".

VISET expects bumper cruise results in 2007

Valletta, 20/12/06 - This has been a record year for Malta's cruise liner industry with 394,567 passengers sailing into the Grand Harbour so far, while prospects for 2007 are even brighter.

According to projections, the port of Valletta will be witnessing an increase of almost 10 per cent in passenger traffic next year. This will mean some 432,167 cruise passengers visiting Malta. Whilst 2006 reached (and exceeded by a small margin) the record year of 2003, 2007 is "reliably expected to outperform 2006 by a further 37,600 cruise passengers, if not more", claims VISET - the company that manages cruise and ferry operations in Malta.

However, one of VISET's major concerns is that ships are getting bigger, and the present infrastructure must be reviewed to ensure that the port is able to accommodate the new vessels.

VISET is discussing with the government "important interventions to its current quay infrastructure".

Meantime, "as time is not on Malta's side, VISET will be embarking on some improvements in the coming months to satisfy the demand and provide cruise operators with a reliable and professional service".

Chamber calls for autonomous tourism authority for Gozo

Valletta, 20/12/06 - "The Malta Chamber of Commerce and Enterprise's Leisure and Tourism Economic Group is concerned at the elimination of the Gozo-based holidays segment from the Malta Tourism Authority marketing directorate", said group chairman Vincent Tabone.

Tabone was referring to an interview given by MTA chairman Sam Mifsud and authority chief executive David Mifsud to The Times (of Malta) on 30 November in which they said the authority's original seven segments would be reduced to five - eliminating the summer and winter sun leisure segment and the Gozo-based holidays and the growth and other markets segment (see following item - MTA 're-engineers' marketing function).

Tabone said that both the MTA and the Ministry for Tourism and Culture have always "sung the praises of Malta's sister island as the showcase of the Maltese tourist offer, but it seems that the new MTA team is not that much in favour of such a statement and have thought it wise to eliminate it as a segment group.

"We feel that the time has come to create a Gozo Tourism Authority which would be autonomous and would have its own independent structure to exclusively market and promote the island of Gozo", Tabone demanded.

The LTEG chairman insisted that the MTA's principal aims are to market and promote the Maltese islands, and, consequently, the group does not agree with the idea - mooted by the MTA's Mifsud's - that the MTA should involve itself into paying for the part leasing of an aircraft that will be used on different routes next summer.

"This should be the responsibility of our national carrier Air Malta in liaison with MTA. The money earmarked for this project should be spent on the promotion of Malta and Gozo in new markets".

Tabone stressed the fact that "now that the helicopter service between the two islands has ceased to operate, we recommend to the competent authorities to build an airstrip that can take fixed winged aircraft with at least a minimum of 20 seats so that the air link between the two islands will resume as soon as possible with better facilities and prices".

MTA 're-engineers' marketing function

Valletta, 20/12/06 - Following the Leisure and Tourism Economic Group's criticism of the elimination of the Gozo-based holidays segment by the Malta Tourism Authority, the latter issued a press release explaining that its "approach to market segments has been reviewed in the light of the recent re-engineering of the organisation's marketing function".

As a result, "the concept of segments has been narrowed to focus on travel motivations".

The management of the MTA's relationships with tour operators, the development of growth markets and the promotion of Gozo as a destination now "enjoy a distinct status within the authority's marketing operation.

"Motivational segments consist of a number of specialised reasons for which tourists visit the Maltese islands.

"Such specialised reasons require specific marketing strategies which differ substantially from the mainstream marketing undertaken by MTA to attract winter and summer sun leisure tourism to the islands.

"The concept of growth markets is not defined as a segment, due to the fact that its purpose is to identify and nurture potential new segments and geographical source markets for eventual consideration and inclusion in future marketing plans.

"Acknowledging that the island of Gozo is a destination with its own segments profile, the MTA has set up a Gozo division to widen the scope of the previous Gozo-based holidays segment.

"This effectively improves Gozo's status and its weighting within the overall operation of the Malta Tourism Authority. Consolidating the division will be additional functions assigned to the division head in terms of input into product development, enforcement, branding and other MTA functions.

"Input by industry stakeholders will continue to be forthcoming through the members of all the segment advisory committees".

Cruise traffic rises in October

Valletta, 20/12/06 - Total cruise passenger traffic rose by 6,602 in October compared to the same month last year, "reflecting mainly passenger departures, including persons travelling in transit and those embarking from Malta", the National Statistics Office reports.

In October there was a 15.3 per cent increase in passengers travelling in transit, "with major increases in passengers of Italian, British and German residency".

Embarkations from Malta decreased by 651 compared to the corresponding month a year ago. Passenger landings decreased by 394, "in part reflecting the drop in embarkations".

However, cruise passenger traffic in Malta rose by 31.1 per cent during the first 10 months of 2006.

Passenger departures increased by 30 per cent, mainly reflecting an increase of 76,624 passengers in transit.

For the most part this increase was reflected in passengers residing in Italy, Germany, the United States, the United Kingdom and Spain.

Embarkations from Malta went up by 4,704 during the period, whilst passenger landings increased by 74.3 per cent.

The increase in embarkations was partly reflected in higher landings by Maltese passengers, although landings by persons residing in the United Kingdom rose significantly as well.

The number of cruise liners calling in Malta decreased by three in October, bringing the total for the January to October period to 315, up by 29 over the same period last year.

KM passengers to use new Sofia terminal

Mosta, 20/12/06 - Air Malta passengers will be among the first to use a new terminal at Sofia International Airport from 28 December.

The new terminal meets EU requirements for servicing passengers and implementing required border controls and has an annual capacity of 2.5 million passengers and a peak-hour rate of 2,000 passengers.

The building and parking lot of the new passenger terminal will be officially inaugurated on 27 December, Bulgaria's transport minister Petar Mutafchiev said.

The construction supervision authority has not cleared other parts of the new facility, including the new taxiways.

Strabag, the Austrian company hired to build the new passenger terminal, and the Bulgarian government are scheduled to negotiate on reciprocal claims regarding cost overruns and missed handover deadlines.

41% rise in outbound October traffic

Valletta, 20/12/06 - In October 19,276 residents traveled abroad, an increase of 41 per cent over October 2005.

In the first 10 months of the year, meanwhile, the number of Malta residents leaving the islands totalled 216,866, a 12.2 per cent increase over the same period a year ago, the National Statistics Office reports.

The most popular destination was Italy, accounting for 31.3 per cent of the total traffic.

Moreover, there were more males travelling in the first 10 months of the year than females - 59.8 per cent versus 40.2 per cent.

The greatest proportion of travelers, 46.4 per cent, were aged between 25 and 44 followed by those in the 45 to 64 year old age bracket.

Think English, think again

Birkirkara, 20/12/06 - Travel-Malta Destination Management has not bought Paola based Think English Language School, but has "concluded a management and operations agreement with the owners and will be operating the school as Travel-Malta School of Languages", Giovanni Corrieri tells Island Travel Trader Online. (See Travel-Malta buys Think English.)