Spectator players

Kurt Ritter, CEO Rezidor SAS Hospitality and winner of the International Hotelier of the Year Award, echoes Din l-Art Helwa and MHRA. During a stay, not sufficiently idle or long enough for him to, with respect, form an objective, informed view of the local situation, the eminent gentleman urged Malta to cap hotel bed stock. It is not difficult to surmise how and why Mr Ritter echoed MHRA's current favourite tune. He was in Malta to sign Rezidor's commitment to the former Golden Sands Hotel, henceforth the SAS Radisson Golden Sands Resort and Spa.

Like me, Martin Scicluna will recall that many a decade ago, the Golden Sands was among the first holiday properties to venture into the hospitality scene. The new MTA/Mepa sanctioned property will stand on the site of its now demolished forerunner. All cheers to the Island Hotels Group for recycling a substantial proportion of building material and other waste.

Bed availability has been the cornerstone, and rightly so, of Mr Ritter's creed and success. His emergence into world prominence was achieved with SAS International Hotels by increasing the company's portfolio from 29 to 159 "signed agreements" in eight years.

He plans to better that in the next 10 years and develop the "existing Rezidor SAS portfolio of brands to 700" and, unbelievably, launch new brands. Mr Ritter has made his name on quality and increased bed availability.

Clever bed stock increases enhance a hotel's cost effectiveness and economic viability. Why then prevent Maltese hoteliers from adding more beds to existing plant? Of the 50 projects sanctioned or pending MTA approval on November 1, 2002, 34 are extensions to existing or dormant properties.

Among the new properties one finds the pretty Sunflower in Bugibba, the elegant San Giuliani at St Julian's as well as the latest five star property on the market, the InterContinental, at St George's Bay, incidentally built on a location previously occupied by three hotels, where site virginity has already been ruffled by human intervention.

Aesthetics are subjective considerations, but can anyone quibble with the urgent need to do something about that ugly space in Tower Road, Sliema, once occupied by the Regina Hotel, the stage of many a youthful caper?

Whether the end result is yet more luxury flats or a four star hotel is up to the owners and their financiers, certainly not to Prince Albert of Monaco, who should have been told that more than two-thirds of Malta remains purely virginal.

While His Highness and Mr Ritter, are, in leisure parlance, casual or passing trade, the crowds who fill the stadium of our small world are home grown or regular customers. As Mr Ritter sees excellent prospects at Ghajn Tuffieha, Meridien and their Mr Bartles look forward to managing the new five star property at Balluta Bay, both interested spectators, and about to become bigger players.

Malta's hotel rates are still competitive and, when compared to other European destinations, possibly too competitive. However, between 1999 and 2002, MHRA's survey shows that on average three, four and five star hotels have, in varying degrees, increased their average achieved room rate (AARR).

Whether this was enough to offset increased fixed and operating costs is another matter but the survey also explodes the myth that three star hotels are regularly swallowed up by five star competitors! A virtual impossibility when five, four and three star AARR proportionately stands at 7:3:2.

Perhaps a better solution could be the hoteliers' firmer resolve to stand up to tour operator pressures and cut price offers, tenable only by parallel cuts in service and product. Hotel building moratoria do not strengthen resolve.

Unless the government and MTA wish to score own goals and become victims of their own good intentions, a moratorium should not imply revoking permits already issued or automatic refusals to projects in the pipeline.

What MHRA knows and Din l-Art Helwa, possibly yet to learn, is that potentially this already means an addition of 6,500 approved beds. The question however is not the number of beds but what proportion of them are good beds? Tomorrow's piece is all about tactics.

Tomorrow: The moratorium effects of a non-moratorium.