Bright summer for hotels

The hotel industry has enjoyed a "good" summer, with widespread increases in occupancy and room rates, leading to growth in profitability, according to the Deloitte survey for the third quarter of this year, released by the Malta Hotels and Restaurants Association yesterday.

Commenting on the findings at the Preluna Hotel & Spa, Nick Captur from Deloitte described them as "a bit of a bonanza for the hotel sector", spread as they were across many hotels in most categories. "We have not had such a positive survey report in quite a while," he said.

However, the cumulative results for the nine months to September remain affected by the weak start to the year and are not as strongly positive as those for Q3 in isolation, Mr Captur added.

The data for the three-month period showed that while the number of tourists was up by 1.5 per cent, retaining the strong gains achieved in 2004, the mix of nationalities had changed substantially, with a record 16 per cent rise in British tourists, following more flight capacity from the UK.

The increase of British tourists, however, "masked" falls from five to 11 per cent in arrivals from practically every other source market, including Germany, Italy, France and the Benelux countries, said Mr Captur, adding that it was a "major concern".

In the five-star sector, room occupancy rose by six per cent between July and September, while the average achieved room rate (AARR) rose by 2.4 per cent. Room occupancy increased by two per cent and AARR by 3.8 per cent in the four-star sector, and by six per cent and 3.8 per cent respectively in the case of the three-star category.

The gains in occupancy have taken the industry to the highest levels seen in the third quarter for many years, the survey showed, while gross operating profit margins per available room increased in all sectors, also achieving the best results seen for Q3 in many years.

Mr Captur pointed out, however, that with a seven per cent fall in the number of rooms compared to last year, part of the good results could also be attributed to the reduction in spare capacity, rather than underlying growth.

Some new hotels that were due to be open in time for summer did not, so their business had to be relocated to the benefit of the existing hotels, he explained.

On an international level, the increase in occupancy levels at the top end of the market here during July, August and September was higher than in Costa del Sol, Mallorca, Cyprus and the Canary Islands, although Cyprus had the highest increase in AARR.

The positive results of the Q3 survey were also reflected in industry prospects for the next six months.

The survey found that five-star hotels are expecting better, or unchanged occupancy levels compared to last year, while the four-star hotels are expecting better, or unchanged rates over the next six months.

Although, for the first time in about five years, the industry was being encouraged by some positive results from the MHRA hotel survey, association president Justin Zammit Tabona said it still faced many open issues, including low-cost carriers and coping with higher-than-expected energy costs.

Ryanair, for example, was offering free flights, barring taxes, for the whole month of January, he highlighted.

"One good season does not mean all our troubles have faded away," Mr Zammit Tabona said.

Speaking about the overdue restructuring of the Malta Tourism Authority, he said the MHRA needed to see its segment leaders and advisory board in place.

While expressing his pleasure at the fact that there was an interim marketing strategy for next year, Mr Zammit Tabona insisted on Malta's presence on international TV "whatever the cost", particularly on the CNN weather report. He urged the MTA to finalise the issue.