Market Overview Josef Formosa Gauci CEO Malta Tourism Authority

Tourism Performance 2009 was a negative year both for international and local tourism. Reversal of this trend started in December of 2009 and is persisting this year. The first two months of 2010 registered an increase of 7% in tourist departure figures. Most of the main source markets are showing recovery including the UK, Malta’s largest source market accounting for 35% of inbound tourism. Italy was the star performer in 2009, replacing Germany as the second most important source market for Malta. This positive performance is continuing this year.

Tourist Departures %Market Share 2009 Change 2009/2008 FRANCE 73,40075,14981,15272, %6.1% GERMANY 125,810130,049150,793122, %10.4% IRELAND 15,37828,13030,48925, %2.1% ITALY 112,548113,651144,456159, %13.4% NETHERLANDS 37,83234,78336,92033, %2.8% RUSSIA 21,77022,90923,41217, %1.5% NORDIC COUNTRIES 73,68387,28185,51467, %5.7% SPAIN 20,66037,42849,49744, %3.8% UK 431,344482,404454,356415, %35.1% OTHER 211,811231,726234,267225, %19.0% TOTAL TOURISTS 1,124,2361,243,5101,290,8561,183, %100.0%

Tourism Performance 2010 January to February % Change 2010/2009 FRANCE 4,2907,1975,3294, % GERMANY 10,62316,02911,49310, % ITALY 10,66413,17514,52119, % SPAIN 8313,9951,6904, % UK 47,52244,95838,01639,3163.4% OTHER 28,35335,83131,83731, % TOTAL TOURISTS 102,283121,185102,886110,0256.9% Tourist Departures MIA passenger data indicates: March 2010: An increase of 12.3%, equivalent to 22,559 more two-way passengers or 11,279 more one-way passengers. Passenger Movement Data

Competitor performance 2010

Tourism Trends The reversal of the negative trend is due to both external and internal forces. The international economy is showing signs of recovery and consumers are slowly regaining confidence. To address these challenges and sustain the local tourism industry, the MTA is adopting a three-pronged approach: the continued development of airline accessibility and a sustained promotional campaign that is sensitive to the needs of today‘s markets renewed initiatives with tour operators The profile of tourists visiting Malta is changing and the industry needs to finetune its strategies to benefit from the changing trends and cater for new tourist needs and expectations.

Passenger Movements by Flight Type A significant shift in type of airline used has been experienced over the recent years. The share of low cost airlines has increased at the cost of legacy and charter business Charter17.4%14.8%10.7% Schedule – Full Service Carriers 69.1%64.1%66.4% Schedule – Low Cost 13.5%21.1%22.9%

Booking Behaviour Tourist booking patterns show a significant shift from package to non-package trips.

Tourist Expenditure The decline in tourist expenditure was more significant in package trips than in non-package trips. (€ 000s) Package Non-package expenditure Other expenditure Total Air/sea fares Accomm ,413109,97768,981335,724998, ,297141,510101,215375,0471,058, ,299162,032125,563370,3171,041, ,544148,734114,660338,417916,355 % Change 09/ %-8.2%-8.7%-8.6%-12.0%

Tourist Age Profile The changing airline scenario is attracting a relatively younger tourist, from Italy and Spain in particular.

Average Length of Stay The average length of stay has declined from 9.5 in 2006 to 8.5 in 2008 and JAN FEB MAR APR MAY JUN JUL AUG SEPT OCT NOV DEC TOTAL

Tourists’ Motivations ‘Novelty’, ‘Climate’ and ‘History/Culture’ feature as top motivations for tourists visiting Malta. Repeat business is strongest from the UK followed by Germany. UKFranceGermanyItalySpain Climate50%60%49%35%47% History/ Culture 34%41%49%36%41% Novelty36%53%55%56%67% Previous Visit39%7%21%10%4% Accessibility10%22%16%23% Value for money 21%30%23%31%18% Maltese Hospitality 20%3%7%4%

Tourist Activities Tourists who spend nights in Gozo are more culture and activity oriented than those who opt for a Malta only trip. They engage more in activities such as diving, walking and visits to local produce/craft sites. It is evident that the Gozo offer complements and adds value to the Malta offer. MALTA’s unique proposition emanates from the strengths of both islands and this combination differentiates the country from its competitors. Malta Only TripGozo Stay Trip Swimming50%63% Diving4%20% Walking/Hiking43%57% Visit Historical Sites67%75% Visit Museums44%46% Visit churches57%68% Visit arts/crafts sites24%37% Visit local produce sites13%20% Spa/Wellness15%12% Shopping63%54% Dine at restaurants66%81%

A constantly changing industry Tourism is a dynamic industry that calls for continuous monitoring of demand trends in order to: Align the provision of facilities and services Adjust marketing approach and identify the most appropriate ‘target audience’ Build on destination strengths and address weaknesses

MTA Corporate Site In an effort to provide a better understanding of how the Malta Tourism Authority operates, we have re- launched our corporate website, mta.com.mt, with a view to providing the trade and the public in general with a detailed overview of the various functions of the MTA. Those accessing this site should also find a number of useful tools related to statistics, AV materials, news and information, applications, contacts and suchlike It is our firm intention to keep updating the site on a regular basis with new features and applications that will undoubtedly be useful, especially by all those who work within our country’s tourism sector

MTA Corporate Site Industry update news: Presenting the MTA’s overall marketing and PR efforts. Press events and media gallery: Reporting both the Authority’s and the Ministry’s press activities. Malta in the Media: Highlighting the Public relations activities as reported in the foreign press. Diary: Highlighting the Authority’s upcoming corporate events and activities organised during the year. AV material: Presentation of our TV spots, videos and official publications. Application and Tender downloads: Facility offering the general public and the trade direct downloads to the most important licensing application forms and related legislation. In depth information about industry training and quality assurance programmes as offered by the Malta Tourism Authority