The Report Company: What benefits does the cruise port bring to the wider Maltese economy?
John Portelli: According to the European Cruise Council, each passenger spends around €60 per head per port of call. That’s on tours, food, gifts and so on. Added to that, there’s also the expenditure of the crew, which on average is around €25. If you consider that we had around 490,000 passengers last year and the estimates are around 89,000 crewmembers, that’s a direct benefit.
The other benefits include ship registration – there are now 17 cruise ships registered under the Maltese flag; also, repairs and maintenance, ship handling, bunkering. All these other benefits accrue from lines calling here. Neither must we forget that there are people who are employed, both directly – for example, those who work for the cruise port and agencies – and indirectly, like taxi drivers and those who work for crafts companies that produce work for the tourist industry.
I believe that over the past four years we’re looking at around €9m between 2005 and 2009 in terms of salaries. In terms of income generated from the industry as a whole, between 2005 and 2009 we’re looking at around €250m. It is substantial.
TRC: What is your strategy in terms of promoting Gozo?
JP: At Valletta Cruise Port we also promote Gozo as a cruise destination because cruise lines can stop overnight in Valletta and then go to Gozo, or arrive first in Gozo and then come to Valletta.
We’ve had a very good response. Since we started this promotion this year we’ve had bookings for this year, which is unusual. I believe the cruise calls for this year for Gozo will be more than they had last year.
TRC: As ships get bigger are you going to have to continually expand the facilities here in Valletta?
JP: We are. This terminal has five quays. The primary quays are Pinto 1&2, Pinto 3 and Pinto 4&5. There is also Gun Wharf Quay and there is another spillover berth at Boiler Wharf Quay.
What we’re doing there [at Pinto 4&5] is an extension where, once it’s done, we’ll be able to berth vessels of over 300m. At the moment the Pinto 1&2 berth takes vessels over 300m. In fact the [MSC] Fantasia, which is a 330m vessel, berths here every Wednesday. The ship here today [the Disney Magic] is 294m. Once we complete the work, we’ll be able to berth two 300m vessels simultaneously. There is also another spillover berth at Boiler Wharf Quay where, once the work is completed, we can take another 300m vessel.
We are preparing for the future and our plan is not to stop. We will continue to develop.
TRC: How did the recession affect the cruise port?
JP: We rely on tourism and obviously what’s happening in our main markets has an impact here. This is the first year where we’re mid-season and we’re still receiving a lot of bookings for next year, when usually a lot of bookings for next year would have been set by now.
The cost of the cruises is decreasing, potentially attracting more customers, which is good, but one also has to question the purchasing power of those passengers. So we’re seeing a shift. For other destinations which rely a lot on flights, like the Caribbean, the cost of the flights [from Europe] has gone up and sometimes the cost of the flight is now more than the cruise, so people perhaps decide to cruise in the Mediterranean rather than the Caribbean. So there are positive and negative effects.
Cruise holidays have become more attractive themselves. It’s no longer a small ship with a small cabin with just a sink and portholes. What you have now on the ship itself is an experience. You have theatres that make you think you’re in the West End. You have the Oasis of the Sea where you have a miniature Central Park. On the Disney ships you have Disney characters. For senior citizens you have tours accompanied by world-renowned lecturers or musicians. There are wine-tasting cruises. The industry has grown and developed so much that they are an alternative to the usual stay of five or six days at a resort.
TRC: The danger might be that the ships are so good that people won’t want to get off them to come onshore?
JP: There is that risk, but it’s not a risk that we’re experiencing. That’s the difference between the Mediterranean and the Caribbean. In the Mediterranean, because of the history and the culture, the passengers tend to leave the ship. If you’re in a port like this then you wouldn’t want to stay on the ship, you’ll want to get off. We receive passenger ratings reports and we’re certainly above average in a number of features like safety and security, transport facilities, the proximity of the city centre, assistance and friendliness.
TRC: You’ve signed some significant deals with TUI and MSC recently. Are they the sort of deals you want to do more of in the future?
JP: TUI Cruises are home-porting here and we’ve signed a five-year deal with MSC Cruises. Yes, for us going after contracts is an objective because we believe that only by establishing a direct clear relationship, I’d say a partnership, can we develop the business further.
I come from a background in the cargo sector. Wherever I’ve been there was always this direct relationship between the terminal and the line and it is how the business can develop.
TRC: Where do most of your passengers come from?
JP: The majority are European, although there are non-Europeans, particularly Americans. I’m confident we will see growth in both regions, but predominantly from Europe.
TRC: You recently rebranded the company, from Viset Group to Valletta Cruise Port. What was the reason for that?
JP: The reason is because in the market Valletta is the brand. We are the company that is at the forefront of the cruise industry in Malta, we are the leaders, we’re the ones that developed the cruise industry in Malta over the past few years. We need to reaffirm this link with Valletta and the new name spells out our mission.
Our core business is cruise. We’re interested in ferry, but our core business is as a cruise company for the port of Valletta. But having said that, we see ourselves as the door to the centre of the Mediterranean. The Mediterranean cruise industry speaks of the east and west Mediterranean, but the centre has so much in it, with North Africa, Malta, Italy and other ports. We can be the entry point to that part of the Mediterranean.
TRC: How is the redevelopment of Valletta Waterfront progressing?
JP: Before it was a public road and now we’ve managed to develop it as a prime destination in Malta, as a family destination but also as a destination for bars. Most of our office space is taken up. We have one property of 1,000 square metres that is still up for lease but most of the offices have already been leased.
Plus we’ve used the quays in the evening, when we don’t have ships, as parking space for our clients. And we’ve also used them for concerts. For us, sponsoring these events is part of our corporate social responsibility.
Also part of our corporate social responsibility is a school programme we’ve started. There’s a 15-minute audiovisual show about the history of Malta. The kids can go for a boat ride around the harbour, they can prepare their own pizza and cook it and they can meet characters like the Grand Master who explains all about the place. We also get Maltese authors whose books they are reading at school. The author will read from their books and speak about their work. We’ve had quite a take-up this year; about 30-40 classes have come.
TRC: What is your outlook for the cruise industry in Malta in the next five years?
JP: I think this business will continue to grow, because of the quality of service we continue to deliver. I believe the direct contact with lines is paying dividends, because it’s one thing sending an email, it’s another speaking to someone or inviting them over. I spend a lot of my time on the road. You need to see the lines to explain your developments. This direct contact does help.