In Episode 12 of The Boardroom, dealing with the local hotel industry amid COVID-19 disruptions, leading hotelier Winston Zahra laid out stark figures to give context to the size of the domestic market in relation to the number of registered hotel beds.

Mr Zahra is currently CEO of UK-based GG Hospitality (a luxury hotel and restaurant firm) and made a name for himself locally after spending 25 years with the Island Hotels Group, the last 10 of which he occupied the role of CEO.

The seasoned hotelier was asked to comment about Monday night’s Government budgetary measures aimed to spur domestic demand, among other key principles, with the goal of reigniting the local economy. One particular measure will see each resident of Malta and Gozo aged 16 and upwards receive a €100 voucher to be spent on local hotels, restaurants and bars, by end September. 

Asked by presenter and business writer Jo Caruana about the effectiveness of the measures, put into place after the tourism industry – together with other sectors – was effectively shut down for three months, Mr Zahra agreed that it is a good short-term boost, but also highlighted the number of bed spaces in Malta:

“If I just put this into context…there are about 40,000 registered [hotel] beds on the island. If you work out from now till the end of the year – If those beds had to be fully occupied by the local market over the next seven months, that’s about 8.5 million bed nights that 400,000-odd people have to fill.

“Even at 25 per cent occupancy, that means that every Maltese person would have to spend five nights in a hotel between now and the end of the year.

“I am trying to put into context the size of the domestic market in relation to the number of beds that needs to be filled. I am not even going near the 4,000 licensed ‘airbnb’ beds, and a total of 9,000 licensed and unlicensed accommodation establishments.

“The reality is that local hotels cannot survive on the local market, it just isn’t enough,” he cautioned.

The Government has announced plans to open up the airport and ports on 1st July, where a total of 19 countries have been designated as ‘safe’ for tourism.

Turning to issues of sustainability, Mr Zahra followed on from fellow guest speaker, Eden Leisure Group CEO Simon De Cesare, who highlighted how the number of hotel and holiday accommodation beds to go on the market would require a staggering increase to the three million tourist arrivals experienced in 2019.

“Yesterday’s [budget] injection [for the hotel industry] is about €30 million in my estimate, helping much needed demand, which is significant.

“We do need to decide, however, what we want out of our tourism industry. Years ago, we spoke about 1.5 million tourist arrivals in a year as being the ‘mecca’, we are now at double that, and as Simon said, if the room stock in the pipeline goes ahead, we have to increase that by another 1.5m – is that sustainable?”

Mr Zahra urged decision-makers, now that the worst of the pandemic appears to be over, to take stock of the industry locally and decide what kind of tourism the island wants to attract.

“Why do we want people to come to Malta? Is it because it is a cheap destination or is it because it is a special destination? When you look at the characteristics of Malta – there is lots to work with. We have never really taken the time to look back and think about what we really want out of the sector”.

Mr Zahra acknowledged that by and large, the biggest challenge to forming a concrete vision for the sector is infrastructure. He pointed out that with the way parts of the economy has been built, with many businesses depending on the new three million figure, scaling back the industry without impacting such businesses negatively will be an obstacle.