Hoteliers' mixed feelings

Rising costs are worrying the Malta Hotels and Restaurants Association, even though it welcomed the government's commitment to aggressive marketing and the introduction of new routes.

The Malta Tourism Authority received a direct injection in the 2010 Budget of €31 million - an increase of €3 million - and the rescue package for the industry was raised to €5 million.

The infrastructural and capital projects that would help improve Malta's competitiveness with other destinations were also very positive, the association said.

The MHRA added that the initiatives and schemes announced to help small and microenterprises was a step in the right direction and could be beneficial to a number of small operators, particularly in the restaurant industry.

However, the association said it was concerned about the increasing operating costs related to the cost-of-living adjustment and the new electricity tariffs.

"The announced increases will represent a substantial rise in running costs, which in no way can be recovered due to the very aggressive downward pressures being experienced on hotel rates," the association said.

The electricity tariffs were of great concern as they would widen the gap between rising costs and the recurrent drop in revenue.

Once again, the association objected to the introduction of the 50c tax per guest night in April, which, it said, would have a very significant adverse affect on the industry. It also pointed out that it was not clear how the government was planning to collect the tax when over 30 per cent of tourists stayed in private apartments and not hotels.