Cruise Tourism generates
jobs and income
The cruise industry in Malta
needs to have a proper economic
impact analysis of cruise tourism.
Without it, one can neither evaluate
exactly the contribution that the
cruise industry is making and can
eventually make to the Maltese
economy, nor strategically plan
ahead to maximise our resources.
Without it, we are on the losing
side. Having such an analysis means
knowing the present parameters
and therefore this will be an
excellent launching pad for the
Maltese cruise industry develop-
ment plan for the coming years.
After all, how else can the industry
stakeholders form an objective
assessment of the potential of this
tourism segment? This applies
equally to all those impacted by the
industry, from policy makers to the
general public. It also applies
to those members of the tourism
industry who could benefit with
further product growth strategies,
such as hoteliers and airlines, with
the advent of homeporting.
So forgive me for not being able
to explain in detail the contribution
of cruise tourism to the various
segments of the Maltese economy.
In view of the lack of this material,
we are left with only one option:
refer to studies undertaken at
a European level, extrapolate
meaningful research findings,
and contextualise them to the
scenario in Malta.
Our point of reference?
The comprehensive analysis
“Contribution of Cruise tourism
to the economies of Europe”
undertaken by G. P. Wild
(International) Limited and
Joshua G Giordimaina
Business Research and Economic
Advisors, as engaged by the
European Cruise Council and its
partners. This study makes for
some eye-opening reading.
A European
growth industry
The first thing to get your
attention within this report is
the phenomenal growth of cruise
tourism in Europe and its economic
significance. In 1996, an estimated
1.2 million Europeans cruised, but
by 2006 this figure had nearly
trebled to 3.4 million, representing
an increase of 183%. A 17% growth
in 2007 has taken the figure to a
record high of 4 million.
In 2006, cruise industry direct
expenditures increased by 27%
over 2005. In turn, they generated
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a 25% growth in total output, a Which European The €10.6 billion in direct
20% expansion in total employ- countries benefit the expenditures throughout Europe in
ment and a 25% increase in most and in what way? 2006, as indicated in the following
employee compensation. figure, were broadly distributed
Different countries benefit in across the major source segments.
These economic impacts included different ways. Some were able
the following: to take a bigger share of the Furthermore, throughout Europe
total direct spending. during 2006, cruise tourism
• €10.6 billion in direct spending expenditures generated €3.6
by cruise lines and their For example, Italy managed to grab billion in compensation. This
passengers, 30% (€3.2 billion) as the leading compensation included that
• €23.9 billion in total output, centre for cruise ship construction received by employees of the
• €225,586 full-time equivalent in Europe, and for being the largest cruise lines, direct suppliers to the
jobs, and cruise embarkation and destination cruise lines and the employees of
• €7.5 billion in employee market. establishments providing goods and
compensation. services to cruise passengers.
Construction and maintenance of
Where does the cruise ships plays such an important Where does Malta stand?
income come from? role that the four major centres
for cruise ship construction, Italy, In a rather good position actually.
The typical argument about cruise Finland, Germany and France, not According to the same report, with
tourism goes something like this: only accounted for 88% of ship- €77 million in total compensation
“Ships are here only for a day, and building expenditure, but also for impacts, Malta accounted for
their passengers are rushed from 62% of total industry expenditures 1% of the total European impact.
one place to the next. At most, in Europe during 2006. This is, of Furthermore, with 382,400
they stop for a coffee and a course, fuelled mostly by the large passengers in 2006, Malta ranked
souvenir! There is only so much number of ships on order from the in the 8th position, with a market
that the country can benefit from major cruise operators to increase share of 2.4% of total European
these one-day visitors.” their capacities, to keep up with cruise passengers.
future demand and in their
This argument is quickly proved continuous search for cost efficiency. Businesses in virtually every sector
wrong when one looks more closely of the economy can be positively
at how cruise tourism operates, and But construction and maintenance impacted by the cruise industry
more specifically at what services is not the sole source of income here in Malta. On the “Direct
and products are required to sustain for European countries. Cruise Industry Expenditures
this industry and its growth.

Where did the €10.6 billion in

direct spending by cruise lines
and their passengers go? Direct Cruise Industry
33% 19%
These expenditures were Expenditures in Europe, 2006
derived from four major sources:
Passengers Purchases
• Cruise passengers,
• The construction and 9% Value of Shipbuilding
maintenance of cruise ships, 39% Cruise Employees Compensation
• Cruise line purchases in support
of their operations, and Cruise Line Purchases
• Compensation of cruise line
administrative staff and crew
in Europe.

June 2008 63
by Country 2006” (ECC) ranking,
Malta ranked 11th with €100
million in direct spending, a 7.8%
growth from 2005, and accounting
for 1% share of the total.
This is not to be underestimated –
especially when one considers that
Malta is a single-port country and
primarily a destination market. In
fact, Malta was the first single-port
destination on the ECC ranking,
with all preceding countries having
multiple ports.
But isn’t this enough?
Of course, having a cruise tourism
impact analysis focused on the
cruise industry in Malta would
give all stakeholders a much
clearer and more detailed picture
of the benefits – not to mention a
measurement tool for the eventual
development of product-market
growth strategies. However, lacking
that information, we can reach
certain conclusions by inference.
As a start, one would do well
to take a close look at the
performance of other European
countries and use them as
benchmarks.
Doing this, one immediately
notices that the best performers
participated in ALL segments of
this industry, and not just by being
destination markets. This can So the next time you see a cruise
be seen for example with Italy, liner entering our Grand Harbour,
UK and Germany. Together they think beyond the number of
accounted for almost two-thirds passengers onboard and into the
of the direct expenditures of the infinite possibilities that are open
cruise industry. for virtually every business sector
in Malta.
This means that, as a country, we
need to step up our game in all Feedback and further
segments. This can be achieved discussions on these issues
by being a source market for cruise are more than welcome, and
passengers, promoting Malta to can be addressed to Joshua G
cruise companies to maintain Giordimaina, VISET Malta plc,
headquarters facilities and joshua@visetplc.com
providing crew, providing
shipbuilding and repair services,
providing provisioning and fuelling
of cruise ships and other products
and services and, of course,
improving our product offer so
passengers spend more of their
money in Malta.
This should be coupled with
targeted and aggressive marketing
in the major source markets for
cruise passengers, to generate
enough brand appeal to turn Malta
into a “must-see” destination for
cruise passengers while making it
more saleable to itinerary planners.
Such a wide embrace will give
Malta the possibility of capitalising
more on the growth of cruise
tourism in Europe, and create
positive ripple effects across the
whole economy.
June 2008 65