The president of the Hotels and Restaurants Association, Tony Zahra, yesterday appealed to hoteliers to keep their rates up, saying the “perfect summer” was on its way.

I can’t understand this, you must help yourselves

“It is incredible that you guys (hotel owners) are discounting your rates. Why? I can’t understand this. You must help yourselves. Don’t discount rates because you don’t have to,” he said.

Cutting the rates even by €1 would make it hard for the association to convince the Government that hotels needed help to remain sustainable, Mr Zahra said during the presentation of the findings of the routine survey assessing the performance in the first quarter of the year.

“It’s going to be the perfect summer. We have the perfect script,” he said, adding that other countries might face weather problems.

Raphael Aloisio, of audit firm Deloitte, said tourist arrivals between January and March increased by 6.1 per cent when compared with the same period last year. However, there was a drop in four- and five-star hotel occupancy.

Mr Aloisio said almost 74 per cent of the total increase in arrivals opted for private accommodation.

Apart from a slight dip in February, there was a positive trend across all the three months.

The number of guest nights increased at a faster pace than arrivals, up 12.7 per cent. Sixty three per cent of guest nights were in private accommodation.

Even tourist expenditure increased, by almost nine per cent compared with the first quarter of 2012, he said.

Occupancy in five-star hotels dropped marginally to 46.7 per cent, a trend also reflected in four-star hotels, which saw a reduction of 1.5 per cent to 58.6 per cent. Three-star hotels, however, saw their occupancy rise from 44.7 per cent to 50 per cent.

While welcoming the positive results, Mr Zahra said the association had been complaining about sustainability issues. The Government had to increase arrivals in the shoulder and winter months to generate higher revenue without raising costs, he said.

Utility rates also had to be lowered by 4c a kilowatt and VAT had to be cut to the original five per cent from seven per cent, Mr Zahra said.

“This will be a major investment in the wider economy and not just the tourism industry and the association was confident that such a measure will pay for itself,” he added.

For example, if 11 hotels – out of the present 110 – with an average of 200 rooms invest €25,000 in refurbishment over 10 years, this would generate a direct return of about €10 million to the Government from VAT.

“It’s a win-win situation,” he said.