The tourism Ministry said that while it acknowledged that some hotels were closing down because it would be more advantageous for their owners to replace them with flats and sell them or homes for the elderly, there were 16 new hotel or extension projects. These were expected to come on stream next year.

These projects included three five-star hotels increasing bed capacity by 412 beds, 11 four-star hotels increasing capacity by 2,012 beds and two three-star hotels providing an additional 130 beds. These projects involved a Lm50.6 million investment, the ministry said.

The ministry was reacting to a statement by the Labour spokesman on tourism, Evarist Bartolo, who has called for an action plan to save the tourism industry.

Mr Bartolo said the drop in the tourist spend was leading to the closure, or the intention to close, of at least 20 hotels in Malta and Gozo.

The ministry added that there were applications for two projects for self-catering clusters which were being considered by the Malta Environment and Planning Authority. It was estimated that investment in these two projects would reach Lm3 million.

The minister added that the owners of another hotel had informed the Malta Tourism Authority that the hotel would be reopening in 2006 following an investment of between Lm4 million and Lm5 million.

These projects did not include the Cottonera and the Manoel Island/Tigné projects where investment reached Lm160 million.

The number of beds in hotels, tourist villages, aparthotels, guesthouses and hostels had risen from 39,790 in December 2002 to 40,979 in October 2003.

The ministry said the government had been forecasting a recovery in tourism in the second quarter this year.

Following a drop in the first four months of this year, statistics issued by the National Statistics Office showed that the number of tourist departures in the first seven months this year rose to 601,612 from 596,181 in the same period last year.