Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1694844330719.pdf (Malta)
BUDGET 2021 PROPOSALS BY THE GOZO TOURISM ASSOCIATION CONTENTS Preamble List of Proposals Connectivity Airlink Sea link MIA-Cirkewwa Shuttle Service Cruise Liner Business Accommodation Swimming Pool Licenses Marketing the Destination Tourist Establishment Product Upgrading Gozo Product Human Resources Regional Statistics Conclusion 2 Preamble The prime objectives upheld by the Gozo Tourism Association since its inception twenty years ago in February 1999 have been primarily based on protecting the interests of its Gozitan members involved in the operation of their tourist establishments.
These main objectives also imply the protection of jobs generated by this important industry on the island of Gozo.

While tourism on the Maltese Islands has been growing over the last 55 years, it has been relatively tough along the years, for our Island to maintain a healthy growth rate despite declining market shares.
Although Gozo was experiencing the relative growth from the foreign tourism and is optimizing on the domestic market, however Destination Gozo has experienced a drop in foreign arrivals in 2019 when compared with 2018, and this when Malta registered a record of 2.7 million arrivals.

This situation is going to be more negatively impacted during 2020 due to the effects of Covid19.

The tourism sector on Gozo now needs to look beyond the covid pandemic.
Whilst we are still working and contributing in order to establish mitigating measures which would help to preserve the Gozitan tourism, we must look beyond the Covid19 crises and focus on a proper restart and recovery.

The following proposals are intended as mitigating measures which are still needed at this stage and also other measures encompassing medium to long term actions which should assist the recovery once the Covid19 crises is over.
It is in this context that once again the Gozo Tourism Association is putting forward these Budget proposals, which we hope would be favourably considered by the Ministry for Finance in its upcoming Financial Estimates for 2021.

3 The Proposals CONNECTIVITY 1.

The Helicopter service initiative is to be reactivated, whilst ensuring that this service should offer the check-in facility at the Gozo Heliport to outbound passengers via the Malta International Airport.

2.
2.

GTA is proposing to Government to build at least a 450 metre airstrip that can accommodate the landing and take-off of a 20-seater fixed wing aircraft.

3.

The reduced ferry fares scheme from Monday to Thursday is to be continued for particular periods during the year.

4.

A scheme of reduced ferry fares is to be introduced for the weekends during the period November to March.

5.

An integrated ticketing system for Gozo Channel commuters.
This system will provide a single ticket which is valid both on the ferries as well as the public transport.

The full potential of such a product can also be exploited by a move to use ‘smart’ ticketing.

6.

The Association is asking for the introduction of the fast ferry between the two islands, and this budget should allocate the necessary funds for the introduction of a fast ferry service.

7.
7.

Provide and re-introduce in addition to the four existing ferries, another ferry dedicated for cargo to operate all year round between Mgarr and Cirkewwa.

8.

The necessary infrastructural investment in a cruise berthing buoy off Xlendi Bay, as a replacement to the existing one, and a new buoy off Mgarr harbour in order to offer alternative berthing facilities around the West and South coast of Gozo.

9.
9.

The immediate repair and maintenance of the Mgarr landing quays which has become an eyesore as well as posing a hazard to cruise tourists disembarking and embarking on the tenders.

10.

Initiate the construction of the ring road around Victoria 11.

The creation of parking spaces in Victoria, Marsalforn, Xlendi, Dwejra and Mgarr.

4 THE PRODUCT 12.

Proposes to Government to fast forward the amendments to the Tourism Act as soon as possible and preferably by the end of the summer season 2021.

13.
13.

Reduction of VAT on the accommodation to 5%.

The VAT rate for other tourism related services like restaurants, diving and transport should be reduced from 18% to 10%.

14.

As per EU Directive 2001/112/EC Article 98.1 & 98.2, the vat applicable for admission to shows, theatres, fairs, amusement parks, concerts, museums, cinemas, exhibitions and similar cultural events and facilities should be 7%.

15.
15.

The extension of the wage supplement for the tourism sector and including new employees recruited after March 2020 up to at least the end of April, 2021, and beyond if need be to sustain the recovery of businesses.

16.

The commissioning by Government of a Carrying Capacity Assessment Study for Gozo Tourism, with particular focus on accommodation supply and other tourism services in Gozo for the next 15-20 years.

17.
17.

That all types of accommodation having a swimming-pool and which are covered by an operating license issued by the Malta Tourism Authority, will be exempted from REWS license fee for 2020 and 2021.

18.

The waiving off of all licenses due for 2020 and 2021 to all tourism related establishments covered by an operating license issued by the Malta Tourism Authority payable to the Malta Tourism Authority, Lands Department and Transport Malta.

19.
19.

A strong international marketing campaign to kick start foreign arrivals when restrictions on travel are lifted off.

20.

Target the repeat clientele that Gozo has garnered.

Gozo as a destination has garnered a reputation of attracting a high percentage of repeat visitors which is estimated at 38%.

21.

Replace the Gozitan tourist profile from the senior citizen one to a younger generation.

22.
22.

Create, offer and entice new products like adventure, activity, sports, walking and well- being in the absence of the cultural calendar.

23.

The re-introduction of the vouchers scheme to be launched after the festive period covering the period January to March 2021 24.

A scheme for all MTA licensed tourism establishments to cater for the upgrading of their product.

This scheme is to be financed 70% by Government funds and 30% by the establishments’ owners.

25.
25.

The updating of the Diving Master Plan, by the Ministry for Gozo which was carried out through EU co-financing way back in 2006 and implement the actions proposed in this master plan which were never activated due to lack of funds.

26.

The upkeep on regular basis of the rural roads leading to self-catering accommodation for easier access, especially during winter time.

5 27.
5 27.

The Intervention Team set up by the Ministry for Gozo in 2017 should cover under its remit, ownership, maintenance, and management of several tourist spots like: the Qbajjar Promenade, the Three Hills Garden in Marsalforn, the Villa Rundle Gardens, Zewwieqa Waterfront, country walk paths, dive sites etc.

28.

The development of sports facilities, including a water park, a theme park, athletics track and training camps facilities.

29.
29.

The setting up of a Cittadella Foundation, with the participation of the various stakeholders.

HUMAN RESOURCES 30.

Training schemes (practical and theoretical) during the winter months aimed at improving knowledge and skills in the tourism industry, including training in soft skills, while encouraging retention of employees during off-peak months, sustained through grants coupled with employer and employee full NI Credit.

31.
31.

Scheme targeted towards foreign employees to integrate better through the learning of the Maltese or English Languages and basic knowledge of the history and culture of the Maltese Islands.

32.

A scheme that encourages employees and owners already in the tourism sector to obtain Post graduate certification, Post graduate diploma and Master of Science in Hospitality Management.

33.
33.

Develop the ITS Gozo Campus into a specialised vocational tourism institution that caters not only for Gozitans but also for Maltese and foreign students who opt to follow specific courses.

34.

The NSO office in Gozo should collate more Gozo specific statistics.
This data should include tourism related statistics even on accommodation in the self-catering sector, together with other relevant data that constitutes the whole Gozitan tourism product like the diving sector and entrances to tourist attractions.

6 Connectivity The introduction of the low-cost airlines in the late 2006 was one of the determining factors for the increase in tourist arrivals from 2007 onwards and up to 2019 when the Maltese Islands are hitting the over 2.7 million tourist arrivals.
The prime objective of the introduction of such airlines, was obviously to make Malta more accessible and more competitive in the holiday package price.

On the other hand, in the coming months Malta will experience significant drops in connectivity due to the Covid19 pandemic.

Mainland Malta, always felt that connectivity was the key to tourism success.
Even on the sister island, we Gozitans, and especially those operating in the tourism sector in Gozo, feel the same about connecting Gozo to Malta and the outside world.

We Gozitans, relying totally on mainland Malta, have learnt at our own expense, that connectivity can be one of the setbacks in getting tourists to Gozo.
7 The Airlink While appreciating the fact that the present Administration has embarked on the studies with regards the viability of an undersea-bed tunnel between Malta and Gozo, the Gozo Tourism Association still believes that investing on an airlink will further improve and enhance connectivity to Gozo in the short and medium term.

The future of the tourism industry on Gozo, relies more than ever on additional connectivity to reach the island.
An all year round, island destination, can only be saleable if there are multiple, reliable, consistent, effective and cost sensitive types of access from/to the mainland and from/to the outside world.

In this respect, the Gozitan tourism operators are still living the experience of the absence of an airlink and are fully aware that Gozo is losing through this lack of alternative connection, both in tourist arrivals as well as in other opportunities such a link will bring about.
In our opinion this is a setback in air connectivity, and especially when taken into consideration that, a helicopter link between the islands was in operation for the period 1990 to 2006.

The Gozo Tourism Association notes with satisfaction that Government has issued a call for tenders for the re-introduction of the Helicopter service between Malta-Gozo-Malta.

This decision was most welcomed by the Association but it seems that this vital service for the inter-island connectivity has been shelved.
In this regard the Gozo Tourism Association is proposing that:  the Helicopter service initiative is to be reactivated, whilst ensuring that this service should offer the check-in facility at the Gozo Heliport to outbound passengers via the Malta International Airport.

Furthermore, the Gozo Tourism Association believes that in order to keep the island of Gozo competitively marketable with so many emerging, enchanting destinations worldwide, the inter- island link should be served by an airlink.
 Therefore, for the umpteenth time the Association is proposing to Government to garner political will and build at least a 450 metre airstrip that can accommodate the landing and take-off of a 20-seater fixed wing aircraft.

8 The Gozo Tourism Association believes that such a facility will not only provide the much needed airlink between the Islands but it will open up so many other opportunities which will generate job creation.
Sea link Along these last three decades, much has been achieved with regards to the inter islands connection especially by the sea.

A lot of improvements are also being carried out by Gozo Channel Co. Ltd. A case in point was the introduction in June of the fourth ferry, which basically managed to cut on the queues piling at both terminals in Malta and Gozo, while making it possible for Gozo Channel to increase its trips to 74 daily trips.
The introduction of the fourth ferry was another huge step in improving the sea link.

This frequency of connectivity has been applauded by one and all but especially by the tourism sector cutting down a lot the tourists waiting time upon their arrivals and departures.

9 Yet the Gozo Tourism Association believes that more can be achieved to further improve sustainably the sea connectivity.
In this respect the GTA is proposing the following:  The seasonality element of Gozo should also be reflected in the ferry crossing fares as indeed it is reflected on the accommodation rates.

Therefore, the Gozo Tourism Association is proposing that the scheme of reduced ferry fares from Monday to Thursday is to be continued for particular periods during the year.

 Furthermore, a scheme of reduced ferry fares is to be introduced for the weekends during the period November to March.
 The Gozo Tourism Association is also proposing an integrated ticketing system for Gozo Channel commuters.

This system will provide a single ticket which is valid both on the ferries as well as the public transport.

The full potential of this system is run by more than one operator and, ideally, for more than one mode of transport.

The full potential of such a product can also be exploited by a move to use ‘smart’ ticketing.
 The Gozo Tourism Association is also aware of the Government’s back tracking on a fast ferry service.

The Association encourages and support this other means of connectivity between the two islands, and GTA is asking for the introduction of a fast ferry service which is beneficial to both local and foreign commuters.

 Provide and re-introduce in addition to the four existing ferries, another ferry dedicated for cargo to operate all year round between Mgarr and Cirkewwa.
10 Cruise Liner Business Slowly but surely the island of Gozo is being constantly included in the itinerary of small cruise ships.

This has been especially experienced throughout the period 2013-2019.

Whilst this sector was badly effected and brought to a halt due to Covid19, now is the time that the necessary infrastructural works are carried out to improve the berth facilities for cruise ships on Gozo.
 The necessary infrastructural investment in a cruise berthing buoy off Xlendi Bay, as a replacement to the existing one, and a new buoy off Mgarr harbour in order to offer alternative berthing facilities around the West and South coast of Gozo.
 The immediate repair and maintenance of the Mgarr landing quays which has become an eyesore as well as posing a hazard to cruise tourists disembarking and embarking on the tenders 11 Connectivity on Gozo The Public transport system on Gozo since its introduction has helped increase frequent and continuous connectivity through the whole island.

However, the number of on the road vehicles continued to increase year on year.
Therefore, the appropriate infrastructure on Gozo needs to be taken in hand to meet this heavy demand that is causing delays in travelling times as well as creating more pollution.
Therefore, the Gozo Tourism Association is proposing:  Initiate the construction of the ring road around Victoria  The creation of parking spaces in Victoria, Marsalforn, Xlendi, Dwejra and Mgarr The Product Accommodation During the past recent years, the accommodation sector in Gozo has experienced a continuous improvement and additional introduction of services that varied the Gozitan tourist profile.
Apart from the Hotels, Guesthouses, Apartments and Farmhouses, nowadays Gozo is offering new types of accommodation in several Boutique hotels and the so-called Bed & Breakfast establishments.

The introduction on the market of the Bed & Breakfast concept has been a concern issue for the members of the Gozo Tourism Association operating within the self-catering establishments.

These are constantly complaining about the unfair competition which exists in this sector.
This situation is being brought about, mainly by the emerging number of beds in farmhouses, self- catering apartments and so-called B&B’s that are not licensed to operate by the Malta Tourism Authority.

This situation was never and is still not acceptable to the Gozo Tourism Association.

To this end, the Gozo Tourism Association council has been regularly engaged in discussions both with Government Ministers, as well as with officials at the Malta Tourism Authority in order to tackle this issue.
The Gozo Tourism Association however, notes with satisfaction that the Malta Tourism 12 Authority is giving due attention to this issue and the Gozo Tourism Association is fully aware that the Authority already took a stand and is taking continuous actions accordingly in order to rope in the unlicensed properties operating on Gozo.

However, the Gozo Tourism Association keeps on insisting that this matter should be tackled once and for all, and a practical and just solution should be sought.
In this regard the Gozo Tourism Association believes that a system of positive discrimination in favour of the licensed accommodation units should be introduced.

Furthermore, both the Bed & Breakfasts type of accommodation are not as yet covered by a proper MTA License.
The Gozo Tourism Association is aware of the fact that the Ministry for Tourism has carried out a revision of the Tourism Act and in this respect the Association:  Proposes to Government to fast forward the amendments to the Tourism Act as soon as possible and preferably by the beginning of the summer season 2021.
Although during the past years Gozo continued to reap increases in numbers of arrivals and bed nights, however, the seasonality issue has not been surmounted fully and in this respect, in order to improve Gozo’s competitiveness during the low season, the Gozo Tourism Association is proposing fiscal measures with regards to the VAT rate.
The EU caters for the possibility to implement reduced VAT rates in certain specified situations such as in the case of Islands (refer to as Council Directive 2009/47/EC of 5th May 2009 amending Directive 2006/112/EC) with regards to reduced VAT rates, as has been implemented in case of the Portuguese Islands of Azores and Madeira, and the Austrian enclaves of Jungholz and Mittelberg.

Therefore, the Association is proposing:  Reduction of VAT on the accommodation to 5%.
The VAT rate for other tourism related services like restaurants, diving and transport should be reduced from 18% to 10%.

13  As per EU Directive 2001/112/EC Article 98.1 & 98.2, the vat applicable for admission to shows, theatres, fairs, amusement parks, concerts, museums, cinemas, exhibitions and similar cultural events and facilities should be 7%.
 The extension of the wage supplement for the tourism sector and including new employees recruited after March 2020 up to at least the end of April, 2021, and beyond if need be to sustain the recovery of businesses.

Presently the accommodation bed stock on Gozo is just above the 7200-bed mark.

These are distributed in 26% (1873) in Hotels, Boutique Hotels and Guesthouses (collective accommodation) and 74% (5384) in the self-catering segment consisting of Farmhouses and Apartments.
The Gozo Tourism Association believes that this distribution in accommodation on Gozo is not well balanced, with a heavy dependence on the self-catering accommodation.

In this respect the Gozo Tourism Association is proposing: 14  The commissioning by Government of a Carrying Capacity Assessment Study for Gozo Tourism, with particular focus on accommodation supply and other tourism services in Gozo for the next 15-20 years.
Operating Licenses As highlighted earlier the Gozitan bed stock is a mix of collective and self-catering accommodation which incorporates various types of accommodation with swimming pools.

It goes without saying that the tourism and hospitality sectors have come to a standstill due to the covid outbreak.
In this regard, for the coming year 2021 the Gozo Tourism Association Council, is proposing:  That all types of accommodation with a swimming-pool and which are covered by an operating license issued by the Malta Tourism Authority, will be exempted from REWS license fees for 2020 and 2021.
 The waiving off of all licenses due for 2020 and 2021 to all tourism related establishments covered by an operating license issued by the Malta Tourism Authority payable to the Malta Tourism Authority, Lands Department and Transport Malta.

Through these proposals apart from lessening additional financial strains on the touristic operators, such measures will also prove to be a deterrent that will discriminate positively with the licensed establishments.
Thus, such measures are in favour of fair level playing field in this sector which is commonly known as being inundated with unlicensed properties.

Marketing the Destination The Gozo Tourism Association believes that a focused marketing strategy for Gozo which highlights the Island as a unique destination as guided by the National Tourism Policy should be implemented as soon as possible.

The idea of somehow turning Gozo into another Ibiza in order 15 to increase numbers is not welcomed by the Association.
Therefore, the Gozo Tourism Association is proposing that:  A strong international marketing campaign to kick start foreign arrivals when restrictions on travel are lifted off.

Gozo will face not only tough competition from neighbouring destinations but also drops in senior visitors since these will be still considered as vulnerable and travelling maybe restricted for them.

 Target the repeat clientele that Gozo has garnered.
Gozo as a destination has gained a reputation of attracting a high percentage of repeat visitors which is estimated at 38%.

 Replace the Gozitan tourist profile from the senior citizen one to a younger generation.

As mentioned earlier Gozo might loose part of its clientele due to covid repercussions.

Therefore, a replacement is to be sought and built upon.

 Create, offer and entice new products like adventure, activity, sports, walking and well- being in the absence of the cultural calendar.
During the past year’s tourism in Gozo was always supplemented by a jam-packed cultural calendar of events.

With covid restrictions this might not be any longer possible.

 The re-introduction of the vouchers scheme to be launched after the festive period covering the period January to March 2021.

16 Tourist Establishments Product Upgrading The Island of Gozo has a distinctive cultural, heritage and natural resource base with a quality range of products.
These inherent strengths have to be guarded and enhanced to ensure that they retain their appeal.

There is evidence of slippage in the presentation and maintenance of the tourist infrastructure together with a lack of investment and organisation in many of the services that contribute to the tourist experience.

There is, however, much of which to be proud of, in terms of the quality of the accommodation base and the commitment to quality standards by the majority of the tourism operators.
It is now time for to continue improving the touristic offer on the Island.

Although during the previous budget the Tourism Enable Scheme was launched which helped several establishments to upgrade and cater for visitors with special needs, yet the Gozitan establishments need to continue investing in order to maintain the expected standards of today’s visitors.
In order to entice the private sector to be more pro-active and innovative in the upgrading of the catering establishment, the right climate should be created, that will give space and encourage such approach.

The Gozo Tourism Association is aware that in order to maintain the best product standards, according to guest expectations, ongoing upgrading and refurbishment of the tourism establishments should be carried out.

This is not always possible due to lack of profitability by these establishments.
In this regard and in order to entice the Gozitan tourism establishments’ owners to invest in upgrading and refurbishing, the GTA is proposing the following fiscal measure:  A scheme to all MTA licensed existing tourism establishments to cater for the upgrading of their product.

This scheme is to be financed 70% by Government funds and 30% by the establishments’ owners.

Such a scheme will offer the opportunity for the upgrading of the present MTA licensed tourist establishments on Gozo.
These establishments should include the accommodation providers of all categories, the restaurants, the tourist attractions and the Dive shops.

17 The Gozo Product The infrastructural works, restoration and renovation works being presently carried out, are a must in order to give the Gozitan touristic product a much-awaited uplift.
However, whilst appreciating the efforts being done by Government to improve the Island’s tourism product, the Gozo Tourism Association is proposing that additional initiatives can be taken to improve the image of Gozo as a tourist destination.

The Gozo Tourism Association has been since day one in favour of the ECO Tax contribution, although, we still have our reserves on the collection of this contribution.
Notwithstanding this, the GTA insists that within the scope of this contribution, the Gozitan establishments ECO contributions, together with the contribution from the Urban Improvement Fund (UIF) are to be ring-fenced in favour of the Gozitan tourism product to cover the following projects:  The updating of the Diving Master Plan, by the Ministry for Gozo which was carried out through EU co-financing way back in 2006 and implement the actions proposed in this master plan which were never activated due to lack of funds  The upkeep on regular basis of the rural roads leading to self-catering accommodation for easier access, especially during winter time.
 The Intervention Team set up by the Ministry for Gozo in 2017 should cover under its remit ownership, maintenance, and management of several tourist spots like: the Qbajjar Promenade, the Three Hills Garden in Marsalforn, the Villa Rundle Gardens, Zewwieqa Waterfront, country walk paths, dive sites etc.

 The development of sports facilities, including a water park, a theme park, athletics track and training camps facilities.
18 Furthermore, the Gozo Tourism Association acknowledged, and welcomed the restoration of the Cittadella, way back in 2016.

The GTA also acknowledges the great efforts being done to manage and run the daily upkeep of this Gozitan landmark.

However, in order to facilitate and run more efficiently and exploit the full potential of the Cittadella the Gozo Tourism Association is proposing:  The setting up of a Cittadella Foundation, with the participation of the various stakeholders.
19 Human Resources It is estimated that tourism and related services account for over 10% of employment on Gozo.

Ongoing training in the tourism sector will help maintain the high rate of 38% of repeat guests.
In order to continue offering good quality service and helping the Gozitan Operators in training and maintaining their staff even in the difficult winter months, the Gozo Tourism Association is proposing the following: • Training schemes (practical and theoretical) during the winter months aimed at improving knowledge and skills in the tourism industry, including training in soft skills and languages, while encouraging retention of employees during off-peak months, sustained through grants coupled with employer and employee full NI Credit.
• Scheme targeted towards foreign employees to integrate better through the learning of the Maltese or English Languages and basic knowledge of the history and culture of the Maltese Islands.

20 • A scheme that encourages employees and owners already in the tourism sector to obtain Post graduate certification, Post graduate diploma and Master of Science in Hospitality Management.
• Develop the ITS Gozo Campus into a specialised vocational tourism institution that caters not only for Gozitans but also for Maltese and foreign students who opt to follow specific courses.

Regional Statistics Another issue which is perturbing the Gozo Tourism Association is the lack of information on the tourism sector in Gozo, due to the absence of proper statistics for Gozo.
The Gozo Tourism Association appreciates the work being carried out by the NSO Gozo Branch office in Gozo, which was opened four years ago.

However further collating of data is paramount for planning and decision taking.

Therefore, the Gozo Tourism Association is proposing that:  The NSO office in Gozo should collate more Gozo specific statistics.
This data should include tourism related statistics even on accommodation in the self-catering sector, together with other relevant data that constitutes the whole Gozitan tourism product like the diving sector and entrances to tourist attractions.

21 Conclusion The Gozo Tourism Association is putting forward these proposals as a result of its continuous contact with its member operators within the industry, who revert to the Association with their issues.
In this regard we are strongly aware of the importance of the tourism industry on Gozo.

It is with extreme caution and full responsibility that we are asking your consideration for these special measures in order to safeguard not only the interest of the stakeholders involved, but also the wellbeing of this vital industry on the island.

It is with this in mind that we hope that due consideration is given to our proposals.

Gozo Tourism Association July, 2020 22