'Bleak tourism prospects'

Hotels and restaurants kept seeing losses between January and March this year as tourist figures drop along with their spending power.

A quarterly survey commissioned by the Malta Hotels and Restaurants Association revealed yesterday that, in the first three months of this year, the number of tourists dropped by 17.8 per cent over 2008 while tourist spending fell by 21.1 per cent. Even the nights they spend here fell by 11.4.

Moreover, the occupancy prospects for the coming months are equally dismal as hoteliers continue to count their blessing with last-minute bookings.

For association president Kevin DeCasare, the study by audit firm Deloitte is really a "crisis report".

"It seems that since my appointment to the presidency of MHRA, tourism started going south, making it a rather depressing presidency for me. I would love to be able to announce that things are improving but, unfortunately, this does not seem to be the case. The further time passes, the tougher things seem to appear," he said.

But his bleak outlook did not translate into government bashing. He said that in the circumstances it was not easy to attract tourists to Malta. The Malta Tourism Authority was spending more on marketing and was offering assistance, even financially, to those hoteliers who wanted to market their product abroad and get visitors to Malta.

In addition, Air Malta was offering hoteliers who wanted to go on sales trips abroad to pay just the taxes for their trip. He said hoteliers who wanted to take advantage of these initiatives should present their proposal to MTA and Air Malta.

Mr DeCesare said the industry's performance was adversely affected by the international slowdown in demand as a result of the global economic crisis and a drop in available seat capacity over the winter months.

Still, he said that a significant part of the decline in the first quarter was attributable to the 10.7 per cent drop in available seat capacity on planes. The negative trend could not be improved unless seat capacity was increased in a structured and sustainable manner.

"Drops for hotels are even worse than arrivals. I would like to make it clear to the authorities that if things do not improve we will have serious issues this winter."

But although Malta's results were negative, they were not as bad as the results seen by other countries. France had witnessed a drop of 27 per cent in arrivals, Germany saw a drop of 36 per cent and Spain a drop of a staggering 64 per cent.

But the local situation was still bad and it cut across the board. The decreases in arrivals and guest nights led to a significant drop in occupancy rates for all three hotel categories, with the three- and five-star being worst hit.

Compared to the first quarter of 2008, when five-star hotels registered a gross operating loss of €74 per room, their loss had now exponentially increased to €462 per room.

The losses of four-star hotels increased from €4 per room to a staggering €474 while three-star hotels saw their losses increase from €396 to €576 per room.

In five-star hotels, energy costs had increased by 1.4 per cent, despite lower occupancy.