Hotel occupancy data signal signs of recovery

The tourism industry has shown signs of recovery in the last quarter of 2004, judging by the latest hotel occupancy data.

Though trends were generally positive last year, the industry still operated "below its potential" when compared to earlier years.

Results presented by the Malta Hotels and Restaurants Association (MHRA) in relation to occupancy, room rates and profit margins for the October to December period showed occupancy levels went up in three-, four- and five-star hotels.

Deloitte partner Nick Captur said all sectors had shown signs of recovery throughout 2004. In five-star hotels, for example, occupancy stood at 63 per cent- a one per cent improvement over 2003. Yet, this remains short of the 68 per cent seen in 2002 and earlier.

Major recovery was registered in the four-star and three-star sectors, which experienced an increase of five percentage points to 71 per cent and 73 per cent respectively.

In the case of four-star hotels, the increase came at a cost of a reduction in daily room rates that fell to Lm14.13- the lowest level seen in over five years. Rates for three-star hotels increased marginally by one per cent.

Profits for hoteliers increased overall due to added revenue and cost reductions.

The MHRA survey presented a year ago had shown that occupancy in 2003 had been "very weak" while the profit margins had been as bad as those registered by hotels immediately after the September 11 terrorist attacks.

"Between October and December 2004, occupancy in the five-star sector increased by seven per cent over last year to 56 per cent, combined with a four per cent improvement in the average daily room rate to Lm33.12," Mr Captur said.

MHRA president Justin Zammit Tabona said hoteliers hoped the positive trends would be sustained this year after years of poor trading. "The spate of hotel closures has had a positive impact on the remaining hotels from a statistical perspective but this should be no cause for cheer from a business perspective," he said.

In 2004, at least six hotels, including Corinthia Mistra Village, Forum Hotel, Island Garden Hotel, San Mark Hotel, Concorde Hotel and Xemxija Bay Hotel, closed down.

Mr Zammit Tabona said the "Malta product" was also a source of apprehension due to the generally untidy state of the islands.

The MHRA was expecting the government to take a decision "as soon as possible" on earmarking sites where two golf courses - one in Malta and another in Gozo - could be developed.

Malta Tourism Authority official Naomi Attard said about 1,208,000 tourists are expected to visit Malta this year and an increase in the number of arrivals from Germany and Spain was forecast. The number of Sicilian tourists should also increase as the MTA has embarked on an advertising campaign there.

But what remains a growing concern both for the MTA and the MHRA is the British market. While the MHRA survey showed that the number of tourists from the United Kingdom decreased by about four per cent in 2004 over the previous year, Ms Attard said there would be no significant increase in UK arrivals this year as Britons were choosing destinations like Turkey, Tunisia, central and eastern Europe and the "dollar region".

The MTA was budgeting £1 million to advertise Malta in the UK as this was still "Malta's most important market", Ms Attard said.