The boutique hotels sprouting up in Valletta would need to collaborate, sharing functions like administration and marketing if they are to survive, David Spiteri, the general manager of Infinitely Xara insisted.

This is partly because the small number of rooms makes it very challenging to cover overheads. But it is also because there may simply be too many of them for all of them to survive.

“Take wine bars. A decade ago there were hardly any, and then they started mushrooming everywhere, many of them without a proper market assessment and without a business plan. Many of them were simply not sustainable and changed hands a couple of times,” he said.

“The return on investment is very low for the amount of work and hours that you have to put in. It really has to be a passion. It is not that different with boutique hotels. It is the latest craze and I fear that investors are allowing their enthusiasm to run away with them.”

At the moment, 11 boutique hotels have permits in Valletta, with another 15 interested. He stressed that to succeed, a boutique hotel needs a location, a sound business plan, and careful decisions on where to position itself in the market.

“It is so easy to underestimate what it takes to run to a boutique hotel. Xara Palace has only 17 rooms so each room that is empty represents 7 per cent your revenue lost. Clearly, 100 per cent occupancy every day is nearly impossible to succeed. And yet as a five-star hotel, it still has to have a top chef, round the clock concierge and so on. This is why even big hotels leapt at the chance to build extra floors and spread their costs across even more rooms.

“I think that many of the ones that are opening now in Valletta will either have to be family-run businesses whose motivation is not a huge financial return – or they will need to collaborate and share their fixed costs.

“Running a boutique hotel is completely different to running a large one where the overheads are spread across hundreds of rooms. And very often, each room is completely different, not only in terms of furnishing and style but in terms of type. In a large hotel, you can slot a reservation into any one of a dozen similar rooms. In a boutique hotel, you cannot really offer a room with a Jacuzzi to someone who wants a presidential suite!” he said.

The promotion of a boutique hotel without an internationally recognised brand is tricky enough. It is even harder for Xara Palace since Mdina is not the top locality that a touristplanning to come to Malta would search when looking for hotels.

“This is why you need to have a strong online presence which comes up on the top few listings of a search,” he said.

Xara Palace has succeeded in making a name for itself in various ways. Its relative isolation, discreet entrances and long-term, loyal employees have made it a favourite with celebrities who cherish their privacy – although Mr Spiteri smiles politely and avoids the subject. Its romantic location and award-winning restaurant, De Mondion, have also made it into a sought-after hotel for celebrations from birthdays to anniversaries.

It is tempting to forget that success does not come overnight for established groups like Infinitely Xara.

Photo: Alan Carville

David Spiteri

The company started out with a four-star hotel in Qawra but the Xara brand started with the hotel in Mdina 15 years ago. It was the perfect location for a boutique hotel but the Silent City imposed its own limitations in terms of noise and opening hours.

Besieged by requests from customers who wanted to hold events there, the Zammit Tabona family decided to open a site which would be able to cater for everything from conferences to birthday parties and weddings. Two and a half years ago, it converted its former disco site at Saqqajja into Xara Lodge, with eight purpose-built rooms – close enough to the hotel to act as an extension but far away enough to skirt its restrictions. It even has a swimming pool, used as a quiet summer lido – as well as an additional venue in its own right.

“The facilities mean that we can host a corporate event from breakfast and conference, through to a pool party and then dinner!” he said.

Running a boutique hotel is completely different to running a large one where the overheads are spread across hundreds of rooms

By the time Xara Lodge had opened, Infinitely Xara had also become the operator of Palazzo de Piro, owned by the Metropolitan Cathedral Chapter. The group has a long-term contract but it is hoping to extend it even further, enabling it to invest further in the enormous site, which spans the footprint of three houses. Last November, it converted a storeroom into Sala Panoramica, which seats 200 theatre-style, with stunning views over the Mdina fortifications. It also set up two museums on the site, as well as a cafe and bistro.

With all three locations up and running, the amount of work skyrocketed and it was no longer feasible for all the operations to be handled by the family alone. In November 2013, Mr Spiteri was recruited as the group’s first general manager, able to draw on both his experience with a hotel and a destination management company.

He needs it: the group’s 170 employees handle as many as 100 weddings in a year, as well as all the other corporate and private events.

“We once had 14 events over the course of 24 hours,” he said, stressing that daily interaction with staff was vital.

“We once had the whole place done up as a Norwegian pub for fans during the World Cup – and then reorganised for a seated UK wedding the next. You have to be flexible... and very fast.

“Banquetting is never going to be the same as the fine dining that we offer at Xara Lodge and Palazzo de Piro but we rotate our 40 chefs between the outlets, which works well and ensures that the standards remain high.”

The group remained a hostage to its own success. Its guests still badgered the group to cater for its parties. At first De Mondion used to accept a few selected bookings, but with Xara Lodge’s extensive kitchens at its disposal, it decided to start offering outside catering.

“This means we are using our facilities efficiently and maximising all our resources,” he said, listing some of the many sites it has served at, from open air ones to heritage locations.

“The kitchens can cater for thousands, so really very often the limiting factor becomes how many chairs, trays and glasses you have... which can all be bought or hired.”

There is, as they say, no peace for the wicked, although the 29-year-old has hardly had time to stop long enough to think about it. The group is hoping to clinch two major events this year, but it is not only about numbers. As a member of Relais Chateaux, the group will be hosting the dinner for its annual meeting this November.

“There will be quite a few Michelin starred chefs among the delegates, which will be quite daunting,” he smiled.