Hoteliers brace themselves for tough winter

Hoteliers are bracing themselves for a tough winter as large tour operators and online travel agents report late booking trends.

Addressing the 53rd annual general meeting of the Malta Hotels and Restaurants Association, "Beyond the next wave", outgoing president George Micallef said such trends were extremely price sensitive.

Mr Micallef said the indicated seat capacity for next summer appeared to be similar to this year's but it may be too early to determine that.

The Malta Tourism Authority, he said, would require additional funds to make up for the shortfall in seat capacity and to increase arrivals for next year.

A study the association had carried out on drops in seat capacity found that arrivals will go down by 630 in winter and 770 in summer for every 1,000 seat dropped.

Mr Micallef said that additional funds afforded to MTA should be considered as an investment which is immediately paid back in the form of government earnings and not an expense to public funds.

Hotels, he said, may also be constrained to spend more money in marketing to make up for the likely shortfall next year.

The MTA may have to do the same.

On Air Malta, he said that the airline had to retain a minimum of over half the share of the tourism market. The restructuring process needed to be concluded sooner as it has been left pending far too long.

Turning to hotel rates, Mr Micallef said that in spite of an improvement in occupancy, hotel prices in Malta were still at the same level of 2008 even though the costs had gone up considerably and hoteliers were this year paying an additional €6 million as a result of the increase in VAT rate.

Out of this, the association will be getting back €1.5 million.

He said that it was very unlikely that hoteliers would increase rates next year given the difficult economic scenario. An increase in costs would have to be absorbed by the industry.

Mr Micallef noted that between 2000 and 2010, tourist arrivals increased by 21 per cent and the nights spent in Malta by six per cent.

This market trend continued to prevail and a look at this year's figures showed that the seven per cent increase in arrivals registered between January and September translated to a four per cent increase in occupied bed nights.

He noted that tourists' expenditure depended on the number of nights they spent here and not on volume.

Mr Micallef is being replaced as president of the MHRA by Tony Zahra. Andrew Agius Muscat is taking over from George Schembri as CEO.

Tourism Parliamentary Secretary Mario De Marco said that Malta had reached growth in tourism earlier than its colleagues in the Mediterranean.

"We were one year ahead of our rivals. This year we had a growth of seven per cent over a growth of 13 per cent. We have surpassed Cyprus, Spain and Slovenia."

Dr de Marco said:

"No month is like the other, no year is like the previous. Business models change, tastes adapt and every year we have to find new solutions. By the end of this year we might have welcomed two million visitors to our shores."

He said that the ratio of five tourists per resident was probably the highest in the world.

He noted that even though Malta had a drop in seat capacity, it carried the same number of passengers.

PL tourism spokesman Gavin Gulia said the government should insulate the tourism industry from bureaucracy.

Competition was high and although a growth had been registered, while this amounted to 14 per cent in Greece, it was only seven per cent in Malta.