Hoteliers’ eagerness to build more rooms and larger resorts could drown out the market if it were done all of a sudden, Malta Hotel and Restaurant Association President Tony Zahra warned yesterday.

Speaking during the association’s quarterly industry performance review, Mr Zahra told hoteliers that the island was not going to be getting any larger.

“We have to appreciate that the island is the size that it is, and unless a volcano erupts or something like that, this is all we have,” he said.

“We are adding a lot of rooms all of a sudden, and we need to be careful,” he said.

Speaking to Times of Malta from the sidelines of conference, Mr Zahra said the demand for rooms currently met the supply and was leading to high occupancy rates.

We had a situation in the past where the supply of rooms far exceeded the demand

“However, we had a situation in the past where the supply of rooms far exceeded the demand,” he said.

The veteran hotelier was quick to add that if industry players were not careful, a sudden surge in the number of rooms could see rates dropping.

According to a survey released by the MHRA yesterday, the industry had yet another strong quarter over the past three months. Overall tourist arrivals and guest nights both continued to increase.

Despite these increases, the survey also shines a spotlight on the private accommodation industry.

The overall growth in tourist guest nights, the survey found, was being absorbed by the private accommodation segment, with the hotel segment actually facing a marginal decline in volumes.

The survey, conducted by auditing firm Deloitte, found that while the overall number of tourist arrivals and guest nights continued to increase in the second quarter of the year, there was a significant contrast in trends between private and collective accommodation.

Within the hotel sector, the four-star segment appeared to have gained market share at the expense of the five-star and three-star segments, which reported declines in their levels of occupancy compared to the same period last year.

All hotel sectors reported increases in their overall cost base.

In the four-star sector, this was more than offset by the revenue growth from both rate and occupancy increases.

In the three- and five-star sectors, the rate increases were substantially offset by increases in costs, and both sectors reported relatively consistent levels of gross operating profits per available room for the second quarter.

MHRA on the Paceville master plan

A few weeks was too short to analyse the new Paceville master plan, MHRA President Tony Zahra said yesterday.

Mr Zahra, interjecting during a speech by Planning Authority director Chris Borg during yesterday’s event, said he felt the consultation period on the 200-page document was “just too short”.

“Do you want serious replies and feedback? Then we need more time.”

Mr Zahra later told the Times of Malta that he was analysing the report, “but by the time we get the right people and opinions, it’s going to be too late”.

“It’s a big plan, it’s huge, and the buildings are going to be there for the next 50 years, so let’s do it right,” he said. Asked how long the consultation process should be, he said three months would do.

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