Claire Zammit Xuereb, AX Hotels Malta Group Hospitality Director, shares that although business “is starting to trickle in”, international business is a far cry from what the situation would usually be at this time of the year, although the response from the local market is satisfactory.

To illustrate her point in an interview with The Malta Business Observer, she said AX Hotels’ occupancy would be running at 90 per cent and even higher in the peak of summer but now fluctuates between 20 and 30 per cent, and not in all properties either.

From her experience, she asserts that the lower budget hotels are moving faster, adding that their hotel in Qawra is “doing great, relatively”, with Sliema coming second and Valletta third. “Hotels in Valletta are close to dead with very, very low occupancy.”

Internal tourism, she remarked, made a huge difference but it is not enough for hotels to survive. “It helps in terms of cashflow but that is it,” she said. The hotel director explained that the increase in costs incurred by hotels and the offers that all of them are making mean that the margins are extremely slim.

Ms Zammit Xuereb continued that such is the situation that hotels are forced to change strategy all the time because every day is a new day, and the cancellation of flights is contributing to making the market very volatile.

“You never know where you stand because today you have X amount of bookings and tomorrow you will lose them. You cannot make any forecasts, which makes our life hell. It is very difficult to manage in terms of human resources because you have to make changes at the very last minute since the situation changes drastically within two or three days,” she added.

Ms Zammit Xuereb said the situation vis-a-vis traditional markets has changed already and AX Hotels have experienced an increase in new markets. What will happen in the future, she noted, depends very much on the national strategy Malta will adopt to reposition itself on the global map. She said she believes it is time to lay stress on quality, adding Malta can and has the potential to attract such a market also because of its size and heritage.

Given the country’s infrastructure and capacity, it would make sense “to make a mark-up on every incoming visitor,” Ms Zammit Xuereb explained, stressing she was not saying mass tourism should be abandoned but that stress should be laid on a new segment that is of a higher quality and exclusive.

She is very categoric when she speaks of what lies ahead. “Hotels will survive this summer only if the subsidies remain, otherwise a lot of businesses will collapse. It is also going to be very ugly winter and subsidies must remain until March next year for sure. Some sort of subsidy is a must,” the Director asserted.

In her view, the return of normality very much depends on a vaccine being developed, though she thinks this will not be happening any time soon. However, she predicts that, come April 2021, there will be some sort of normality. “All things being equal, luck being on Malta’s side and if all keep working hard, it would be possible to regain lost ground and start going back to 2019 levels the year after”, she said.

If this comes to pass, Ms Zammit Xuereb thinks that Malta will be in a position “to normalise completely” in the third year, even experiencing “a big boom” between the third and fourth year, provided efforts being made continue, and provided that Malta retains its position in the tourism industry, perhaps even improving it.

This is an extract of a feature first carried in the July edition of The Malta Business Observer