Hotel closures 'is a bad sign'

The president of the Malta Hotels and Restaurants Association, Winston Zahra yesterday warned against interpreting the closure of a number of hotels as being a positive development due to the problem of the oversupply of bed stock.

Speaking at the annual MHRA dinner in the presence of Tourism Minister Francis Zammit Dimech, he said one had to be extremely careful about such statements.

"The fact is that the only acceptable long term solution to the bed stock problem is to increase demand to our islands. Closure of hotels is not a healthy situation and effectively it means that investors are not getting the necessary returns from the industry and this is far from a positive aspect.

"Although some of the hotels that have closed - or are considering closing down - may not have been up to scratch, there are others that have taken this decision that had a good product and enjoyed above average results.

"The fact that they have decided to withdraw from the hotel industry is indicative of the fact that they can get a higher return from another type of investment. While one can argue that this state of affairs is helping the over supply of bed stock it is hardly the most effective way of solving this problem," he warned.

He said MHRA showed solidarity with the employees being made redundant and was working with the General Workers' Union and the Union Haddiema Maghqudin, distributing the names of such people to all their members to try and make it easier for them to be reemployed within the sector.

He outlined the association's main objectives for the year ahead, saying that as one of the major stakeholders in the industry, it had to act as a catalyst to increase Malta's pulling power as a destination.

The MHRA has also decided to join the Malta Business Bureau, at the invitation of MBB's founder members, the Chamber of Commerce and Enterprise and the Federation of Industry.

The association will also be working closely with the authorities to enhance enforcement.

"The MHRA cannot tolerate evasion of licences and taxes which are detrimental to those of us who operate above board and in a professional manner. We know for a fact there are accommodation establishments operating without a licence and that there are restaurants blatantly evading VAT. It is one of the MHRA's objectives this year to help stamp out this damaging abuse."

The MHRA council also aims to focus on the three-star sector, to strengthen the restaurant sector and to revitalise its Gozitan membership base.