Recovery not enough to reverse last year's negative trend

In spite of an increase in tourist arrivals and hotel occupancy last December, the recovery was not enough to reverse the negative trend that persisted throughout last year.

The survey findings were presented by the Malta Hotels and Restaurants Association (MHRA) yesterday.

Deloitte partner Raphael Aloisio said arrivals and guest nights last year had gone down by four per cent when compared to the previous year.

Notwithstanding the stronger performance reported in December, the final quarter of last year still suffered a two per cent drop in arrivals and an 8.3 per cent dip in guest nights.

Though the decrease in occupancy in four-star and five-star hotels was marginal over the entire year, with encouraging increases in December, three-star hotels suffered greatly as occupancy went down by nine per cent.

The biggest decline in arrivals was from Britain and Germany, while tourists from Italy increased considerably mostly due to the launch of low-cost flights.

Significantly, the country's poor showing in arrivals did not follow an international trend because competitors Cyprus, Mallorca, the Canary Islands and Costa del Sol did well last year.

MHRA president Josef Formosa Gauci said this time last year, the association had predicted a gloomy picture for this year.

"Unfortunately, the predictions have turned out to be nearly 100 per cent correct. What greatly pains the association and its members is that it took so long for tangible action to start to be taken," he said.

On a year-to-year basis, the negative impact of low occupancy was compensated partially by improved room rates, a trend that was not sustained in the last quarter when hotels could not match the rates achieved in 2005 when the Commonwealth heads of state and of government were meeting in Malta.

Stressing the need to address the three-star sector, Mr Formosa Gauci said the decline in occupancy was due to a trend, across Europe, whereby tour operators were losing business as more people booked their holidays online.

In Malta, however, there was a problem with the product. While hoteliers acknowledged that work was being done to improve the environment, a lot still had to be done.

The rebuilding of the St Paul's Bay bypass was taking far too long to complete and there were few indications that roadworks on this artery would be ready by summer.

Hunting and trapping harmed tourism, Mr Formosa Gauci said, adding that in dealing with the issue, the government should bear in mind the bad publicity the country gets.

The association's position on low-cost carriers had been proved right as arrivals had increased. Other low-cost routes, namely from Germany and, at least, another route from the UK should be established.

Welcoming the changes carried out in the Malta Tourism Authority's structure and the different approach to the marketing campaign in the UK, the MHRA was pleased to see many of its suggestions included in the tourism plan.

It was now important, Mr Formosa Gauci said, to follow up and implement the plan and enhance all aspects of the tourism product.

"Anything less than substantial growth this year will not be good enough. There is a very long way ahead for the industry to get back on its feet, for the trend of the hotel closures to be reversed, for sustainable profitability to be achieved, for three-star hotels to have a future, for employment to be on a sound footing, for the very negative feelings in Bugibba and Gozo to be addressed," he said.