Room rates advanced at a faster rate that occupancy over the past months, a survey carried out by the MHRA Malta Hotels and restaurants Association shows.

It said occupancy levels in five-star hotels rose by 5.2% to 75.1% this year compared to last year, while the average room rate improved by 5.9% to €121.8.

In the four-star category, occupancy was up by 1,7% to 81.1% while the average room rate advanced by 7.4% to €58.3.

Three star hotels saw a 2.5% advance in occupancy levels to 74% while the average room rate grew by 11.4% to €45.9.

The association said 2014 had been a prosperous year for the tourism sector and could end up being a record.

It was also cautiously optimistic for 2015.

It said the challenges ahead were not few, however. Among them were reforms of the Malta Tourism Authority, the introduction of the new bus service operator, Air Malta's restructuring, a reform of the Institute of Tourism Studies to tailor it to current needs and the setting up of public-private partnerships for product enhancement.

The association looked forward to the setting up of the Foundation for Tourism Zones which will help to address the maintenance and upkeep of those areas.

It also looked forward to a reduction of water and electricity tariffs in March, a reduction which it said it had long called for.