Bed tax replaced by capped tax per stay

Tourism operators are set to benefit from six initiatives aimed at giving the industry a much-needed boost in what they are considering to be a difficult year.

The package includes the shelving of the proposed 50c bed tax, which is being replaced by a capped contribution of €3.50 per tourist per stay, irrespective of the number of nights spent on the island or whether the tourist is staying in a hotel or other accommodation.

The new tax is expected to yield between €3.5 - €4 million, the same target that had been set with the proposed bed tax, that would have been charged per night. The revenue would be reinvested in the industry through a number of initiatives aimed at encouraging hotels to invest in tourism, Finance Minister Tonio Fenech said. It is yet to be decided who the tax collector will be.

The bed tax had originally been announced in the 2009 Budget and its introduction on January 1 this year was postponed to April. The new contribution will not be introduced before June 1.

The tax had been heavily criticised by the Malta Hotels and Restaurants Association but its president, George Micallef, said the one-off €3.50 contribution per tourist, based on their average length of stay, would not discriminate against hotels and other licensed operators.

Announcing the initiatives, Mr Fenech said these were aimed at investment to increase the number of tourists coming to Malta, which would, in turn, have a positive effect on hotels and restaurants and tourism industry operators.

The government will be launching a scheme of between €3-€5 million to help hotels invest in alternative energy. It would cover up to half the required investment, up to a maximum of €200,000, and the project would have to be preceded by an energy audit to identify the individual requirements of those investing in green energy.

The government would also help hotels through soft loans to finance their part of this investment, Mr Fenech said.

Rather than subsidising the utility tariffs, which the hotels already said were too much for them to handle, they were being assisted to cut consumption.

Mr Fenech said the government was also extending the possibility for hotels facing difficulties to get assistance.

On the energy schemes, Mr Micallef said that, although these did not make up for the steep increase in the utility tariffs, hotels would be able to invest to reduce their consumption. Although this would not be felt immediately, it would help in the medium and long term.

The Parliamentary Secretary for Tourism, Mario de Marco said another initiative was the extension of a scheme already in place to help hotels invest in expansion and refurbishment projects.

The present scheme subsidises by 1.5 per cent the interest on loans hotels take to carry out their projects. This is being doubled to three per cent.

He said the government was also extending the budget for joint marketing schemes through which it matched the money invested in individual marketing campaigns.

Furthermore, he said, the government was investing to raise the number of air routes to Malta. A total of 16 new routes will be operating, including six more from Ryanair, which yesterday announced the opening of a base at the airport (See opposite page).

Dr de Marco said the 16 new routes were expected to increase seat capacity to Malta by 7.5 per cent but he did not want to speculate on the increase in the number of tourists.