Hoteliers and restaurateurs are worried about the uncertainty brought about by the Air Malta restructuring and are frustrated that major stakeholders in the tourism industry are left in the dark over the national airline’s future.
“We cannot afford to wait for a rescue plan to be devised and then call in the Malta Tourism Authority to fill in the gaps because time is against us,” the president of the Malta Hotels and Restaurants’ Association, George Micallef said.
“The expertise of the appointed consultants who appear to be heading Air Malta at present is certainly not in question here but expertise in airline restructuring alone is not entirely sufficient because we also need the input and expertise of the local tourism industry’s stakeholders,” Mr Micallef said when reviewing the industry’s performance in the third quarter of the year.
He pointed out the carrier’s rescue plan did not only involve the airline but also the tourism industry that employed thousands of people.
The government appointed a steering committee to oversee Air Malta’s restructuring. Made up of representatives of the government, the opposition and trade unions, the committee will oversee the restructuring of the airline which suffered losses of €31 million in 2009 and is expected to go deeper in the red this year. Mr Micallef said the industry was worried because Air Malta accounted for more than half of tourist arrivals, that is, well over 600,000 annually. Yet, its future was unclear.
Nine months ago the decision was taken to cut back 38,000 air seats from the UK and these had not yet been replaced. Tour operators had no idea whether seats were available for next year and at what cost. They could not afford to wait much longer as there was the risk that operators drastically scaled down their programmes or cancelled their operations. There was also the risk that tour operators bought the seats from low cost carriers and packaged them, to the detriment of independent travellers.
“We feel frustrated the MHRA and other major stakeholders in the industry are left in the dark as to what is happening. We also cannot see why no one from the tourism authorities is directly involved in the restructuring process or sits on the steering committee,” he said.
Mr Micallef added that although the National Statistics Office’s recent figures indicated tourist expenditure increased exponentially, hotel average room rates remained below 2008 levels.
The figures for January to October showed that tourist arrivals totalled 1.2 million, up by 13 per cent when compared to the corresponding period last year. Total tourist expenditure was estimated at €1,034 million, or 23 per cent higher than that for the corresponding period last year. Despite this, profitability was still down by an average 15 per cent when compared to 2007 and 2008.
“This underlines that hotels are still under pressure and facing an increasingly competitive landscape and goes to show it will be difficult for us to recover the two percentage point VAT increase imposed on us as of next January,” Mr Micallef said.
The results also indicated that a substantial portion of the increased tourist expenditure was filtering down to other economic operators and not to hoteliers.
Increasing energy costs continued to be a major issue for hoteliers, who, on average, experienced a situation where 24 per cent of their hard earned increases in accommodation income was eradicated by the increased utility costs, he said.
The MHRA called for a more comprehensive analysis of where the additional tourist spend was going.