Around 20 hotels are expected to apply for extra storeys to be built as a result of Mepa’s new policy on the permissible height of hotels.
The new policy replaces one which failed to attract any investors because its conditions were too stringent. In fact, only one hotel – the San Antonio –actually benefitted from the previous policy.
The original Hotels Height Limitation Policy introduced in May 2013 allowed only two extra floors – and only on existing hotels.
It was also limited to hotels in the designated tourism zones – and there was also a formula which meant that you had to compensate for the volume of those extra storeys elsewhere on site.
“Numerous hotels had come forward but they soon realised that it was not what they had in mind and that they would not be eligible,” Mepa deputy director for planning Silvio Farrugia said.
“When the government realised that its objective – encouraging investment in the tourism product – was not being reached, discussions started once again.”
The new policy made some important changes. For example, it can also be applied to new hotels – and more importantly for existing hotels which are to be demolished and completely rebuilt, which was not allowed under the wording of the old policy.
“There were two hotels in Sliema that wanted to do that so that they could upgrade their operations, as well as the infrastructure like water energy conservation systems, waste management provisions and disability access. All these are now required by the Malta Tourism Authority in relation to their classification,” he said.
“You have to remember how many of the smaller hotels still have room keys! But the investment has to be recouped from room revenue – and the prices cannot be raised beyond the market – so the more rooms you have, the more revenue you can generate. Since they can very rarely extend horizontally, the only way is up.”
Hotels – particularly 5-star ones – are also anxious to be able to cater for very high net worth individuals by increasing the number of suites and things like family rooms.
The new rules specify that hotels can add two floors over and above the limit for that area if the site area is under 5,000 sq.m. If it is larger, then more than two floors can be added, as long as the hotel is surrounded by planned or existing roads, or stands alone.
Another clause attempts to impose good design, saying that blank walls will not be allowed and that the result must be a “landmark design” – which Mr Farrugia agreed was somewhat subjective.
The investment has to be recouped from room revenue, so the more rooms you have, the more revenue you can generate. Since they can very rarely extend horizontally, the only way is up
He stressed that the policy does not give hotels the automatic right to the extra floors – but only sets out the eligibility criteria.
Although it is no longer restricted to tourism zones, the policy cannot be applied in urban conservation areas, ruling out the Xara Palace in Mdina, the Capua/Palace Hotel in Sliema, the Phoenicia and the Excelsior in Floriana. It also cannot be applied outside development zones, which knocks out the Kempinski and Ta’ Ċenċ in Gozo and the Seabank in Mellieħa.
Of the eight remaining 5-star hotels, the Corinthia in Attard might also be affected as its extension could have an impact on nearby San Anton Palace. The Radisson BayPoint and the Intercontinental have already applied while two others are expected to apply soon.
There are 37 4-star hotels which could be eligible of which only around 10 have showed interest so far.
And in the 3-star category, so far five out of the 48 potential ones have come forward.