MHRA calls for urgent, increased funding for tourism
Interest from major low cost airline
The Malta Hotels and Restaurants Association has called for increased government funding for tourism, saying the crisis in the sector caused by the international recession is worse than originally thought.
“It is true that the government increased funds for the MTA in the last budget, specifically for use with low cost carriers and increased marketing efforts.
These increases were well received by MHRA, but I am afraid to say that the situation has totally changed since last November. Actually, as an industry, we underestimated the depth, impact and the extent of the recession. It is apparent that the situation is far more serious than was anticipated by the government,” MHRA President Kevin DeCesare said this afternoon.
“It is therefore clear that much more funds are required to sustain the tourism industry. We estimate, and indeed have already asked the Prime Minister, to allocate a further €8 million for increased marketing and to help establish new routes.”
Mr DeCesare was speaking at the announcement of the hotel occupancy survey results for the fourth quarter of 2008.
Mr DeCesare said that the drop in arrivals experienced in the last quarter of 2008 was bad, “but the indications for the first quarter of this year are even worse.”
“If this downward trend continues over the next six months, then we are definitely heading towards an unmitigated disaster. We just cannot afford to have that kind of reductions. The room rate in the first three months of this year has reduced across the board and hotels are facing a problem with cash flow.”
He thanked Parliamentary Secretary Mario de Marco for being instrumental for the agreement with all banks to grant a 12 month moratorium for hotels for capital repayments.
In his speech Mr DeCesare called on the government to reduce VAT on restaurants (see separate story in news section).
OPPOSITION TO NEW TAX
He also strongly criticised plans for the imposition of a 50c tax on every hotel tourist per day as from next year.
“This is one of the most ill-thought impositions, especially in the current scenario. Not only are we sending out the wrong message to the tourist, but this seems to be sending out a totally different message overall, namely that where other industries are getting a helping hand, and quite rightly so, we are getting clobbered with this ridiculous tax, under the pretext that the funds would go towards marketing the Islands.”
“Mr DeCesare said the MHRA would be advising its members to refuse to collect this tax.
“If the government insists then they should find a way to collect from the airport but let’s hope that common sense will prevail.”
Mr DeCasare complained of poor coordination within the government and called for a super ministry to deal with the roads, cleanliness, street furniture, noise pollution and alcohol consumption in public. In the mean time an emergency task force should be set up to deal immediately with some of the serious issues, he said.
INTEREST FROM MAJOR LOW COST AIRLINE
Concluding, he said there has been a request from a major low cost carrier to fly three routes from Italy and UK starting by June.
“This is a fundamental need which will be very positive for this coming summer and could actually save it. We know that things are not looking good at all and we cannot afford not to have these routes not accepted immediately,” he said.
SURVEY RESULTS
The survey results shown that during the fourth quarter of 2008, 5-star hotels saw occupancy drop to 49.4% from 57.9% in Q4 of 2007. The 4-star hotels had an occupancy of 61.2% (Q4 2007 = 66.3%) while the 3-star sector had an occupancy of 56.4% (Q4 2007 = 61.2%).
Room rates appeared to hold until December and most hotel categories registered rates improvements which partly offset the losses in occupancy.
However it appeared that things got increasingly challenging this year and many hotels were seeing decreasing rate trends, the survey says.
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roderick farrugia
Mar 26th 2009, 23:33
it seems that same of you don't work in this industry.
the hotels are doing their upmost to stay upfloat. i agree with the MHRA 100%.
when your income is from these industry,than you can talk
PETER MURRAY
Mar 26th 2009, 22:42
One hardly required a degree in commonsense or prediction ability to forseee that the gravity of the recession was about to severely impact upon the global economy to the extent it has and therefore vastly reduce and restrict consumers spending power,and the fact that this was not envisaged merely is an indictment of the ostrich-like mentality that pervades the current government.It is absolutely useless to appeal to them for assistance before disaster strikes as they will be immune to reality or facts until it is too late and will remain supine and mute and ,like Nero in Rome,will just watch and wait until the inevitable catasrophe happens and possibly react then.Suck it and see is not an option.Action is required right now and this crucuial help must not be confined to the tourist industry alone ,as such assistance is vital to positively effect all aspects of our daily life.Heaven help us -as our government will not!
Mario Mizzi
Mar 26th 2009, 22:32
VAT should be reduced on everything!! Ever since the introduction of VAT, Malta became uncompetitive. We were warned, not by political parties, but by tourists themselves who prior to Malta joining the EU, warned us of the consequences. And now during this global recession we can see how right they were.
Unfortunately, we did not heed their advise. Our country is burdened with a whopping 18% tax rate.
Pumping money into advertising will not put more money in the tourist's pocket, so be careful.
WE have to admit that tourists nowadays want to go to places where taxes are next to nil.
Malta definitely is not the place.
Alfred Farrugia
Mar 26th 2009, 21:51
If “the situation is far more serious than anticipated by the government,” should the MHRA not have presented the government with its own projections, if it knew any better? Since the industry underestimated the depth, impact and the extent of the recession, it seems that MHRA, which represents the industry, is as much at fault as the government on this issue!
Does the MHRA have an income of its own? Why does it not share its income and expenditure on a yearly basis? What does it do with its membership fees? Why does the government have to do all the heavy lifting on behalf of the industry, when the going gets tough?
Is it not possible for the MHRA to take a few initiatives of its own and supplement the government’s efforts? It is in the interests of its own members that MHRA be more proactive, and that it takes a few business risks where the government is marking time. Nothing ventured, nothing gained.
Paul Barrett
Mar 26th 2009, 21:01
I believe there was a recent report that put Malta fairly high on the list for least value for money. What the specific cost comparisons were I do not know but certainly I get the general feeling that I am not getting value for money.
From the UK tourist point of view, the high value of the Euro against Sterling really does stick the boot in, especially when they can see UK goods costing sometimes double their UK price. There is nothing that Malta can do about the exchange rate but they can do a lot about making the price of goods that come from the UK more realistic to their actual cost.
R.Zammit
Mar 26th 2009, 20:33
Once again, MHRA at its best!
Tourism numbers peaked in the early 90s and have struggled to reach the same levels. They have only done so beacuse primarily MHRA coerced the Government to 'throw' money at Low Cost Carriers (LCCs). Concurrently MTA went on a huge advertising spree, mainly in sustanance to LCCs, again with our tax money.
What is the result? After the initial spurt, the numbers are again down down down. What is MHRA's solution? Throw even more money!
What does it take to realise that unless we fix our product (and this includes many MHRA members), we are wasting all this money.......... and consequently we will soon lose our own Air Malta (the goose that lays golden eggs), which has fallen victim to the unfair practise of huge cash subsidies and marketing assistance given to LCCs. How much longer is Air Malta going to survive? Does MHRA even think of the consequences should Air Malta go down?
We heavily subsidise MHRA's members' electricity& water bills, property aquisition, VAT, marketing, and now even their bank loans.......... at yet we are still very expensive, and we keep losing tourists.
Mick Quinn
Mar 26th 2009, 20:29
MHRA have just woken up to the problem that has engulfed and continues to engulf all of europe, but unfortunately like many here, they have ignored the realities and the likely impact.
Malta is very very expensive, the service in most places is dreadful, the toilets at best poor, and in many cases the food is dismal. People who are going through recession will use their hard earned cash wisely to get value for money, which is not the case when coming on holiday here. A radical overhaul of prices, conditions, attitude, needs to be at the forefront of attracting tourists back to the island. Injecting more government money is not the way forward in this case.There will be many tourist related industries and even some hotels that will close this year, and the money MHRA is rquesting will be required to pay all the social service bills of the people who will be unemployed.
James A. Tyrrell
Mar 26th 2009, 20:10
“It is therefore clear that much more funds are required to sustain the tourism industry." The tourism industry is not just about pumping money into bottomless holes! As others here have said Malta is no longer the value for money destination it used to be. A small example I could give you is a glass of tea. Last year I sat at a cafe and paid 1 Euro for a glass of tea. About 10 metres away was another cafe where the tea was 50 cents. Not too far away from these two was another cafe where the tea was 25 cents. And guess which one tasted the best?
If you want to sustain the tourism industry then stop ripping people off and do something about the state of the country. Both Malta and Gozo are full of empty run-down properties and yet the applications are already in to build more apartments. Why? Fix up the damage at Hondoq and get rid of that bloody eyesore at Dwejra and stop turning the place into a year round building site. What tourist wants to holiday on a building site?
A.Gauci cunningham
Mar 26th 2009, 17:49
Things are indeed looking bad for this tourism year and all those (like myself) who work in this industry (which for Gorg borg's info is the biggest this country has) and live in a place like Bugibba are feeling and hearing doom and gloom all the time!! lets hope that things turn for the better!!
Carmel Camilleri
Mar 26th 2009, 17:19
What cheek!!!
And what guarantee are you giving that your members will not close down their hotels and lay off staff during the low season, just like they did last year (which was a record year for tourism)?
F.Williams
Mar 26th 2009, 17:14
The MHRA should look at what their competitors in Cyprus are offering before going to our Goverment begging for more funding! Check your prices vs the service you are offering!!!
Lee Micallef
Mar 26th 2009, 16:58
Easy solution , try bringing down the extortionate prices
a.camilleri
Mar 26th 2009, 16:50
lets just say malta is not a cheap holiday destination anymore, actually is very expensive compared with others. when i lived in the uk every summer a load of our friends and workmates used to come over together and it carried on for a few years, but in the last few years i cant name any of them that still come here, actually none of them, as they found other destinatoins with more value for their hard earned cash.
buisness people in malta have got the attidute of lets make a quick buck, without improoving the standard.
henry galea
Mar 26th 2009, 16:50
I ask MHRA 2008 was a good year,what have you done with the profits,what have done to attract tourists to hotels.You all like to point you finger as to what the state should do,how about to explor other markets,you cannot depend on three main markets,it's like USA econonmy they can pump all the Fed's money but unless they change the loopholes and give hope to investers that a replica wont happen,tourism through out europe won't improve.
Keith Davis
Mar 26th 2009, 16:43
I think that the MHRA and most of their members can well make some promotions and advertising abroad from the hefty bills they ask when one pays for their services, instead of asking us the tax payers to fund this down turn in tourism.
When things where shiny I do not recall they wanted to offer rooms or meals at cheap prices.
To have a meal or take a room in Malta is too expensive. Everyone wants to become rich in one day!
Gorg Borg
Mar 26th 2009, 16:14
Why is it that hoteliers always want want want...!! About time YOU started marketing Malta the same way the MTA does. Well done MTA for what you are doing.!!!
There are many other industries in Malta that also deserve Govt. funding, not just the tourism industry.!!!