Agreement to soften impact on tourism

The Malta Hotels and Restaurants Association and the government have agreed in principle to soften the impact of the utility tariffs on the tourism sector.

The details of the agreement had not been finalised and the parties were still discussing the type of mitigation measures and whether these would be one-off or stretched over a period of time, the association said.

A Finance Ministry spokesman confirmed there was "a basis for an agreement" aimed at providing support for investment intended to mitigate the impact of the energy rates.

Together with the drop in tourist arrivals and the increasing operating costs, the new utility tariffs - that came into effect on January 1 - would lead to particular sectors of the tourism industry becoming unsustainable, MHRA president George Micallef said.

The tariffs would cost the industry an estimated additional €1.8 million, he said.

According to the association's calculations, hotels will be affected by a 50-per-cent increase and restaurants by 40 per cent. Mr Micallef said he hoped the agreement would be announced in the coming days.

When the new tariffs were launched, the MGRA had protested strongly and argued the higher tariffs would seriously jeopardise jobs in the sector. Tourism Parliamentary Secretary Mario de Marco called on restaurateurs to offer a level of catering service that satisfied everyone.

Although the number of licensed restaurants doubled to 1,256 this year from 636 in 1990, the number of tourists had not increased proportionately. Because of more competition, the quality of service had to reach out to all types of tourists, he said.

Referring to a satisfaction survey carried out by the Malta Tourism Authority, Dr de Marco said seven out of 10 tourists said they were satisfied with the quality of Maltese restaurants. However, the level of satisfaction dropped in the summer months, which meant restaurants were unable to provide the same level of service they offered in winter, he said.