Malta Hotels and Restaurants Association (MHRA) President Tony Zahra asserted that post COVID-19 recovery, “remains stronger than originally predicted” due to collective efforts. This was highlighted during the BOV-Deloitte Hotel performance survey for 2023’s third quarter (Q3), organised by the MHRA.
Michael Zarb, Policy and Economics Advisory Leader at Deloitte Malta reported that based on an estimates for September figures, that is derived from data supplied by Malta International Airport (MIA), tourist arrivals for the third quarter of 2023 are expected to exceed 1 million, surpassing the figure registered in 2019 by approximately 88,000 arrivals.
In this context, guest nights are expected to have increased by 512,000 nights when compared to 2019’s Q3. The increase is in line with increased arrivals, as was registered both in collective accommodation and private accommodation.
Mr Zarb also stated that tourism spend is expected to have reached €1,026 million which is 18 per cent higher than the comparable period in 2019, indicating strong tourism spend for this quarter.
On the other hand, occupancy levels in four- and five-star collective accommodation “significantly dropped” this quarter. This was attributed to the increase in bed stock since 2019 and the shift toward private accommodation by guests in July 2023. Indeed, occupancy in the five-star category decreased to 80.4 per cent, a decline of 10.1 per cent over the same period in 2019.
Four-star hotels registered occupancy levels of 87.2 per cent in Q3, 8.2 percentage points below 2019 levels. Occupancy rates in the participating three-star hotels reached 93.3 per cent in Q3 in 2023.
In Q3, the five-star Average Daily Rates (ADR) increased by 24.6 per cent over 2019 and reached €249.4 per room. Four-star hotels reported rates of €156.6, a 19.1 per cent increase from 2019’s Q3. Participating three-star hotels reported an ADR of €103.7.
Overall, Mr Zarb reported that Q3 registered a quasi-drop of 10 per cent across all categories in occupancy. Specific reference was made to the notable increases in the payroll cost. Despite improved rates in four-star category, net performance was below that registered last year.
The MHRA President acknowledged impending challenges, including overcapacity, emphasising the need for a balance between demand and sustainable growth.
Mr Zahra stated that new regulation such as the Green Deal, FIT for 55 and EU emissions directives impact Malta’s tourism sector, hence calling “for a just transition.”
Referring to spreading conflicts in Europe and the Middle East, Mr Zahra asserted that these are leading to increased costs, decrease in purchasing power for Malta and Gozo’s potential tourists and disruptions in travel sentiment.
Mr Zahra also expressed MHRA’s reservations about the skills card announced earlier, advocating for seamless training integration without any extra burdens imposed to an “already complicated recruitment process” in the hospitality sector.
“MHRA is currently engaging directly with the government, providing constructive feedback for effective implementation, believing responsibility for training should remain with operators to ensure the industry’s long-term success amidst evolving, overcapacity related issues, environmental norms and geopolitical tensions,” he concluded.