MHRA president pours cold water on positive tourism trends

The new president of the Malta Hotels and Restaurants Association, Kevin DeCesare, yesterday poured cold water on the generally positive trends of the quarterly BOV MHRA hotel survey, pointing at the clear emergence of new challenges, stressing that the tourism industry remained highly volatile and warning against resting on one's laurels.

The report showed that tourist arrivals in the first quarter increased by 22 per cent (211,689) over the same period last year and that overall occupancy levels grew by three per cent.

However, Mr DeCesare was looking at the bigger picture. "If you take the first four months of the year, you can see that the gain of the first quarter is practically wiped out," he said.

Taking April into account, tourist volumes were up 15 per cent and, while guest nights generated in the first quarter amounted to 13 per cent more than last year, April showed a drop of 14.9 per cent due to the reverse impact of Easter being in March, shrinking the overall gains to a mere 2.7 per cent.

Tourist arrivals were the highest in the last six years but Mr DeCesare insisted it was time to stop using such figures as a key measure of success and to concentrate on the all-important number of achieved room nights, particularly in view of the fact that the trend was moving towards shorter stays.

The survey showed that the average length of stay in the first quarter was 7.3 per cent less than the previous year, in line with changing travel patterns, which had to be accepted.

Mr DeCesare was seriously concerned about the UK market, which has registered a marginal decline of one per cent in the first quarter. He attributed the drop in the first three months to the UK's economic situation and strongly suggested that the authorities revisit the possibility of opening up more routes from the UK on low-cost carriers, pledging that the MHRA would immediately liaise with the government to combat the problem.

Meanwhile, however, an increase of 47.8 per cent was registered on the three core markets, Germany, Italy and France, with Germany growing by 56 per cent (11,626). Spain grew by 288 per cent (5.767), making it the third fastest growing outbound market.

Mr DeCesare appealed to every stakeholder to prioritise the product to be able to compete in the cutthroat tourism industry. Although people had given up on seeing the product improve, he refused to accept it, stressing on the need for the government to update its laws and regulate on standards, which were "archaic" and did not make sense in today's reality.

Referring to noise pollution and lack of enforcement in Paceville, he said the MHRA stood four-square with the Chamber of Small and Medium Enterprises - GRTU, which was striving to find a happy medium.

Mr DeCesare said it was useless for Air Malta to sell flights and the Malta Tourism Authority to sell Malta if tourists went back home to say it was a "kindergarten".

The MTA should be presenting a top-quality product instead of selling a promise that is not realised when guests arrive, he continued.

Competitors were racing ahead through investment in their product, he said, acknowledging that the matter was also a priority for the Parliamentary Secretary for Tourism, Mario de Marco.

Emerging challenges included the pressure on hotels from escalating food and energy costs and the sluggish booking pace, Mr DeCesare said.

The survey, carried out by Deloitte, showed that each hotel category improved its average achieved room rate (AARR), particularly the three-star sector (28 per cent up), while total tourist expenditure rose by 4.9 per cent (€6.6 million).

As regards occupancy levels, five- and three-star hotels registered an increase of 10.8 per cent and 19.4 per cent respectively and the four-star category experienced a decrease of 4.2 per cent.

However, notwithstanding the fact that Easter was in March, both four- and five-star hotels failed to register increases in occupancy for that month, the report found.

Improved occupancy levels and a higher AARR resulted in each hotel category reporting lower operating losses, despite the period under review being the shoulder months. In fact, operating losses were at their lowest in the past five years in each category.

As regards prospects for 2008, the report showed that over 90 per cent of respondents felt occupancy rates would improve, or remain stable, and were also optimistic about rates.

CIT room nights experienced a growth of 66 per cent over the previous years, generating €2.5 million (Lm1.07 million) in revenue, with hotels expecting business to increase, or remain stable for the next six months.