Advance summer bookings not as good as expected – MHRA

Advance summer bookings are “relatively good” but not as good as most operators in the hospitality industry expected them to be, Malta Hotels and Restaurants Association president George Micallef told The Times Business yesterday. Regular surveys showed some hotel categories were securing occupancies at the expense of rate discounting, he added.

Hoteliers however say booking levels are healthy and increasingly slowly as they confirm the MHRA’s affirmation that bookings are now dominated by the last-minute trend and travellers were leaving confirmation later than ever.

Some of these trends were outlined in a presentation detailing the industry’s progress in the first quarter of the year yesterday.

“We are experiencing an incredibly late booking situation which continues to become shorter,” Mr Micallef explained. “We still have a way to go before we can determine the level of performance of the entire summer season and although we expect it to be good, much depends on the travel behaviour affecting our main source markets.”

Mr Micallef cited a report in London’s The Sunday Times last week detailing how Thomas Cook, the travel operator, was offering 10 per cent off any July package – including the peak school holiday weeks – as hotels across the Mediterranean were worried about low occupancy rates. The report said this may give rise to competing operators to follow, sparking off the inevitable price war stakeholders were keen to avoid.

Island Hotels Group chief executive officer Winston J. Zahra and AX Hotels hospitality director Claire Zammit Xuereb told The Times Business booking patterns had changed dramatically over the past few years. Island Hotels are taking a large percentage of bookings for any particular month as late as the preceding fortnight. AX Hotels, meanwhile, says as much as 20 per cent of occupancy can be secured in just one month; while the trend had its benefits if managed well, it complicated matters and the economics.

“We are looking at the next three months quite positively, with advance bookings at a healthy level so far,” Mr Zahra said. “The timeshare market is today one of the most highly regulated consumer products available. We have a healthy flow of business in this area and we expect results to be similar to those registered last year. We have worked on all our core markets and on some new ones which have given good results.”

Ms Zammit Xuereb said business was increasing but slowly, and rates were still suffering. Sliema seemed to be the preferred destination, even in the summer, a trend that should spur a re-think of the hospitality industry’s business strategies in the northern part of the island, she said.

“Hotels in the north are getting second preference. Even though we know that they will fill, due to the nature of the business, they will not fill with the same market mix and average room rate as that forecast,” Ms Zammit Xuereb explained. “Overall profitability would still be affected. Having said this, one must not forget that these hotels have become totally dependent on their summer month performance, so every inch counts.”

According to the MHRA, the continued growth of the independent traveller market influenced the trend for shorter average stays. While short breaks and online bookings were on the rise, the industry was concerned at the decline of the crucial tour operator business which currently accounted for just over 40 per cent of tourist arrivals. Five years ago, tour operators – which contributes handsomely to night stays as tourist packages are longer – brought 75 per cent of arrivals to Malta, Mr Micallef pointed out.

Meanwhile, the Arab Spring seems to have diverted little business to Malta. Instead, Mr Micallef said, tourism lost by Tunisia seems to have been won by Turkey. Travellers destined for Egypt are likely to have gone to coastal Spain instead.

According to the MHRA, Malta does not have the appropriate products like the all-inclusive beach resort properties to cater for the market traditionally attracted by Tunisia and Egypt. Additionally, the island is unable to successfully compete with prices offered by Tunisia and, to a lesser extent, by those offered by Egypt’s key Sharm el-Sheik.

Libya’s crisis is no longer a major cause for concern and booking patterns have returned to normal after the slowdown during the evacuation process and the announcement of the ‘no fly’ zone, although Mr Micallef conceded “some specific markets” were still cautious about the situation.

According to the president, the MHRA seemed satisfied with the Malta Tourism Authority’s marketing efforts and the support of the Parliamentary Secretary for Tourism for having yield positive results.

“But there are, of course, other stakeholders that are hugely important like Air Malta which is crucial to the tourism industry and the economic success of our islands,” Mr Micallef said. “Better co-ordination between the MTA and Air Malta is required to maximise on marketing efforts.”

The MHRA lamented the spill-over of infrastructural works into the peak season – when certain works are precluded from taking place – some of which has been caused by delays and an “evident” lack of proper site management. Mr Micallef said there were possibly too many projects undertaken at one time.

Meanwhile, Mr Micallef said, the MHRA will continue with “the most important discussion at the moment” concerning the seat capacity for next winter which, he warned, can make or break the industry.