Malta has announced that it will offer cash incentives to visitors in an effort to recoup pandemic-related tourism losses. The Incentives for Free Independent Travellers (FIT) scheme is administered by Malta Tourism Authority who will offer cash incentives valued up to €200 per person depending on the quality of hotel they book into. By contrast, the Irish government has yet to find a solution to its ill-fated ‘stay and spend’ scheme.
Malta is heavily reliant on tourism. Tourism revenue makes up a bigger share of its GDP thank its neighbours Greece and Italy, but visitor numbers have fallen by 80 per cent in the last year from 2.7 million in 2019, leaving the local economy in grave difficulty.
The €3.5m scheme, which will start on June 1, is specifically aimed at ‘free individual travellers’ rather than those who booked using a holiday package or an agent. It aims to attract up to 35,000 tourists.
Guests will receive a government subsidy depending on the duration of their stay, the star-rating of the hotel visited and the area they go to. Whatever the government puts in will be matched by the hotels that sign up to the scheme, with a maximum saving of €200 per person checking into a five-star hotel for a minimum of three nights. Those staying at three- and four-star hotels will be eligible for total discounts of €100 and €150.
Visitors to hotel properties on the island of Gozo will get an additional 10 per cent value on these incentives.
Irish Government Dithering Over Stay & Spend
Ireland is another island nation that has seen catastrophic losses to tourism revenue due to the pandemic. 2020 was “an absolutely traumatic year” for the tourism and hospitality industry, to quote Eoghan O’Mara Walsh, chief executive of the Irish Tourism Industry Confederation (ITIC), with comparable revenue losses to Malta – up to 85 per cent, including the loss of up to 150,000 jobs.
The government response to the crisis was the ‘Stay & Spend’ tax scheme that provided a maximum of €125 in income tax credits to tax-payers who spend up to €625 on hospitality and accommodation between October 1 2020 and April 30 2021. Although the government put aside €270 million for the scheme, only €2 million was ever used, with critics declaring it overly complicated and not user-friendly.
The scheme will lapse on April 30, but government has yet to determine whether a reformed version of it will replace it for the key summer months or whether it will introduce an entirely new scheme. The ITIC has called for a voucher-based scheme to be introduced in Ireland that would incentivise every adult to spend €200 on accommodation and food in an effort to kickstart the staycation market. The ITIC believes the scheme would cost the exchequer around €400m but that the cost is justified by the failure of the Stay & Spend scheme to use up more than €2 million of the allocated €270 million. The scheme would be similar to the one introduced in the UK last summer.
Speaking to the Irish Examiner, Mr O’Mara Walsh said: “It beggars belief that government will just let this scheme wither away without any benefit to the public or the beleaguered tourism industry.”
“The scheme urgently needs to be redesigned as an upfront voucher for every household and should run over the autumn period when industry will need all the help it can get,” he said.
The time for ‘dither and delay’ – to quote Boris Johnson – is over. As we face into a summer season that will determine the very survival of the tourism industry in Ireland, the government needs to act now.