Tourism crawls forward but hoteliers optimistic

Tourism is getting back on its feet but at a snail's pace, according to the Malta Hotels and Restaurants Association which yesterday announced the results of its survey for the first quarter of this year.

"The key performance indicators for the tourism sector all improved when compared to the corresponding period last year but are still a far cry from what we achieved in 2007 and 2008," MHRA president George Micallef said.

Tourist arrivals increased by seven per cent over last year's dismal performance but this still meant an almost 12 per cent decrease over 2008 - one of the best years ever.

The star performer was Italy, which brings in the second highest number of tourists after the UK, while a decrease was registered in arrivals from Germany and France.

Guest nights were also up 6.3 per cent compared to 2009 but 12.2 per cent down from 2008.

Interestingly, the biggest increase (17.6 per cent) was recorded in terms of how much tourists spent on holiday - only 4.6 per cent lower than the tourist expenditure in 2008.

But not everyone benefitted from these increases in the same way, the survey found.

Five-star hotels were the primary beneficiary of the increase in guest nights, which enabled them to claw back approximately 50 per cent of the drop in occupancy registered last year.

But three- and four-star hotels failed to make up for the volume losses registered last year. And while these hotels registered significant improvements in room rates of 10 and nine per cent respectively, five-star hotels lowered rates by five per cent.

Mr Micallef cautioned against "across-the-board discounting" sparked by panic, since reduced hotel rates would take years to be restored to previous levels.

He added that one of the biggest problems faced by the sector was the increase in utility tariffs. The overhead costs increased by 10.5 per cent in five-star hotels and 4.6 per cent in four-star hotels, he said, calling on the government to ensure the industry was not burdened with any further "government-induced" costs.

The gains of five-star hotels were offset by a five per cent drop in room rates and a 13 per cent drop in food and beverage income because people were opting to buy from outside the hotels, he said. As a result there was no revenue growth.

The survey also found that all three hotel categories registered a gross operating loss for the quarter, with the largest being registered in the five-star category, which made higher losses this year than last year.

But operators are optimistic about what the future held and Mr Micallef said the results of the second quarter of the year would be more positive, despite the disruption of the volcanic ash that saw hundreds of flights cancelled and travellers stranded.

He praised the government's efforts to increase seat capacity and the island's accessibility through new routes.

However, Mr Micallef stressed that around a third of tourists were not staying in hotels and some were unaccounted for. He appealed for the authorities to curb abuse and punish those who did away with paying licences, permits, VAT and taxes, while competing unfairly.