The reopening of Gozo and the return of optimism

The shopping and catering establishments all very busy. Tourists, including day visitors, all over the place. The evenings notably less busy but still eventful. This was a fair description of summer of 2019 in Gozo.

The same for the previous few years.  Prior to the pandemic, Gozo was experiencing a reality that probably was unprecedented. Gozitans were positive, even bullish, about their future.

To appreciate how remarkable and unusual this optimism was, one needs to understand that historically, the level of uncertainty faced by Gozitans was always higher than their Maltese counterparts. The physical characteristics of the Island and its dependency on few sectors always made future days uncertain. One bad year could easily wipe out the gains made in the previous five years. This partly explains the higher saving rates that Gozitans normally exhibit. Rainy days were always kept firmly in mind.

And rainy days did occur. The pandemic reminded us of the financial crisis of 2008. The difference being that this time it was several times deeper. Few forgot 2008 and the struggles they had to make ends meet and the lack of support from Government. The international financial crisis happened at a time were Malta was facing several structural macroeconomic imbalances, including fiscal ones. The Government had marginal room for maneuver. Businesses, workers, and households stood alone. 

Rainy days were always kept firmly in mind…and rainy days did occur.

Thankfully, 2020 was different. There was prompt and decisive action from government side. Such intervention proved to be a key factor in keeping workers’ redundancies to a minimum and permitting tourist establishments to ride the storm. As the rest of the country, Gozitan business and workers found great support in the wage supplement. The hundreds of millions of public monies kept them afloat. Numerous other schemes, including partial refund on rent and utility expenses, were announced, and were well implemented. Gozitan businesses were eligible for the highest degree of assistance, both in terms of coverage as well as in terms of rates. On top of this, the vouchers scheme encouraged people to go out and spend, proving instrumental in kickstarting consumer demand, with over a quarter of a million vouchers used in shops, hotels, restaurants, and accommodation in Gozo.

Nonetheless, the pandemic proved longer and harsher than expected. It was a great shock to many. Gozo was hit harder due to its higher vulnerability. Its higher dependency on tourism. One out of five jobs in Gozo is linked to tourism, and a lower share of manufacturing, and certain services made life harder. The income of hundreds of families, not necessarily primary, suddenly was not there anymore.

Besides the strong and consistent support from government in terms of financial support, Gozo features strongly in terms of vaccination, probably exceeding those administrated on the main island.

Better equipped and better prepared, we are now moving towards summer. Restrictions are gradually being eased and on the back of experience and lessons learned, we should avoid missteps that took place last year.

The wage supplement extension made the survival of most of the businesses possible. Internal tourism should also rebound in the coming months, albeit far from the numbers recorded prior to the pandemic. The voucher schemes will offer an incentive to Maltese families to spend their holidays in Gozo. Last year, passengers crossing between Malta and Gozo were obviously lower than the previous years, but for the summer months, the damage was somehow mitigated, with the drop in crossings contained to circa 300,000 fewer passengers than the previous summer. The introduction of the fast ferry will undoubtedly help, making the trip to Gozo and back easier, especially to day-trippers.  One hopes that measures like those announced last year whereby Gozo Channel fares were reduced during the week, are repeated. These encourage further staying in Gozo for holidays not just on weekends, but rather throughout the week.

We now move forward with a measured sense of optimism.

The past few months were tough. The steps forward towards some form of normality will not be easy. We have to remain vigilant and continue to observe the health authority measures. We will soon see the same optimism in Gozo as was the case before the pandemic.

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