Hotels to get breathing space on bank loans

Hotels will be able benefit from a one-year moratorium on capital repayments of pending loans, following a government suggestion that was taken up by the main banks.

The initiative is aimed at improving the cash flow of hotels across the board in the current difficult economic climate. It will assist hoteliers who have taken out loans to develop or refurbish their properties, Tourism Parliamentary Secretary Mario de Marco said yesterday.

It would be useful for hotel owners and operators to have more capital at their disposal to use on further product embellishment, he said.

The moratorium, however, is not automatic. Any hotel wanting to take advantage of the concession would have to approach its bank, which would consider each request on a case-by-case basis, depending, for example, on the track record of the account holder.

The banks would also want to be satisfied that the capital retained would be used in the best interest of the company, Dr de Marco explained.

Quoting the United Nations World Tourism Organisation, he said the situation was "not a crisis in tourism but a crisis that can affect tourism". As opposed to the September 11 terrorist attacks, which affected the desire to travel, people still wanted to go abroad but the economic scenario had affected their ability to do so, he explained.

The Malta Hotels and Restaurants Association is backing the moratorium. Its president Kevin de Cesare thanked the government and the banks for the "well-needed measure", which would allow the hotels to concentrate on marketing.

He expressed confidence in the strong model of the 50-year-old tourism industry, believing that the effects of the stimulus packages around the world would be felt within six to nine months.

Representatives of Bank of Valletta, HSBC, Banif, APS and Lombard banks said they were supporting their customers and the industry in difficult times, as they had always done in others.