Some 200 years ago, Adam Smith, the father of modern economics, wrote: “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public.”
In fairness to the Malta Hotels and Restaurants Association, it is a trade organisation whose members contribute enormously to the economy of Malta and it has not been afraid to take brave stances pressing for higher standards and better regulation and encouraging greater air access to Malta.
However, recent MHRA worries about private short-term letting are in danger of becoming special pleading against a vibrant and essential new feature of global travel opening new tourism markets to Malta.
Just as low-cost carriers opened new holiday flights for millions, so young people especially are now able to stay affordably and safely in private accommodation worldwide. The Airbnb internet application links people with spare rooms or homes with tourists and business people seeking a more personal experience. Since 2008, it has become a global phenomenon offering over 1.5 million properties in over 170 countries. Easy to use with straightforward obligations respecting the realities of strangers staying in people’s homes, a striking feature is that not only do visitors rate where they stay but the hosts rate their guests. Both parties can see the other’s track record before making a booking.
Instant rankings challenge providers to up their game and do so consistently
In Malta, there are already over 1,000 individual listings on Airbnb. A casual glance reveals that of 340 locations offered, 72 are rated as “superhosts”. A snapshot admittedly, but a higher proportion than the 34 of 670 Maltese collective accommodations on booking.com currently rated by their guests in the top three categories: superb, exceptional and fabulous.
Add this feedback to websites like Tripadvisor, businesses’ own comment sections and Malta Tourism Authority ratings, and every tourism outlet is constantly being evaluated by customers.
Instant rankings challenge providers to up their game and do so consistently. Sadly, it is not unusual for Maltese businesses to receive wonderful ratings interspersed with terrible ones when they have had an off night for whatever reason. Such is the nature of the digital revolution, visitors’ comments are now a vital part of any location’s marketing communication if they are to capture those all-important online bookings.
When low-cost carriers first came to Malta, physical bed capacity constrained the number of flights offered in the summer peak. The advent of tools like Airbnb means these considerations are thankfully history and Malta has become “like a sponge”, as one airline director put it to me: Malta successfully absorbs every passenger. Ryanair is increasing available seats to Malta by 50 per cent this current financial year confident that, together, hotels and short lets will offer the beds to absorb the extra 300,000+ visitors.
Just as low-cost carriers have opened Malta to tourists from places never previously imagined, so the new short lets are bringing visitors who don’t consider staying in hotels. I recently met a wealthy couple with their three young children enjoying Mdina for whom a home let made Malta a viable alternative to their holiday home in Tuscany when a hotel, no matter how child-friendly, would not have worked for them.
Concern that the 25 per cent of Maltese bed stock now in private accommodation (according to the NSO) detracts from hotels is probably misplaced. Instead, new markets with new customers are being attracted to Malta.
Airbnb is particularly attractive to younger generations, helping balance the more elderly profile of Maltese tourists and creating a market for returnees who might well chose a hotel in future. The private short-let market which has long existed in Malta through word of mouth and local estate agents has simply gone digital and global with 50 million Airbnb website visitors each month.
Far from creating an uneven playing field, the government and the Malta Tourism Authority have shown foresight in taxing and regulating short-term lets. Malta caters for rental of a whole property through the Holiday Premises Regulations and room rentals through the Host Family Accommodation Regulations with VAT and income tax regulations providing for both these types of accommodation. Many people offering private letting mention their compliance as a marketing plus because of viral stories of guests losing accommodation when authorities shut providers down.
Airbnb collects 14 per cent San Francisco hotel tax, so perhaps the Maltese ecology charge and VAT might be handled through similar cooperation in future.
Letting quality is self-regulating through online feedback required from every stay, but formal regulatory powers already exist without needing new ones. Regulations should be sensitively policed and enforced across the entire hospitality industry without prejudice.
Philip Lingard is an independent education and culture consultant based in London and Malta