The most recent hotel survey prepared by consultancy firm Deloitte for the Malta Hotels and Restaurants Association confirmed the anecdotal evidence that the tourism season had another very good quarter with tourist arrivals and guest nights continuing to increase. Those who have their finger on the pulse of the industry need to make some sobering reflections on the challenges they see on the horizon.

MHRA president Tony Zahra warns that hoteliers’ eagerness to build more rooms and larger resorts could drown the market. It is this government’s policy to be more liberal in the granting of building permits for hotel accommodation, hoping this would stimulate economic growth. Many argue that there is little evidence this policy comes out of a well thought out national strategy for the industry.

Mr Zahra is right in fretting about creating too much overcapacity in the accommodation sector, especially at a time when, according to the study, private accommodation seems to be taking away market share from hotels that demand much more intensive investment.

At present, we seem to be going through a boom phase. But no one should harbour an illusion that this will last for ever. We have seen quite a few hotels being pulled down because when tourism was at a low ebb their long-term financial feasibility proved to be defective.

The MHRA is right in demanding more time to digest the implications of even more tourist accommodation being created in the medium-term as a result of the Paceville master plan and the construction of high-rise buildings in the Sliema area. No wonder banks are being cautious before welcoming these speculative development ventures.

The competition between investors in collective and private accommodation for tourists can cause some tensions. Hoteliers argue that they cannot avoid the legally-imposed costs to provide the services that tourists require. The authorities seem less able to ensure that private accommodation owners practise the same fiscal rectitude. The hotel industry leaves a much better economic return for the country because it generates more employment and has a bigger multiplier effect on other economic activities connected with tourism.

All these factors have to be factored in a strategic plan for sustainable growth for the industry. But there are other factors that need to be taken into consideration. Policymakers and operators need to ask themselves whether the island has reached saturation point in view of its small size, traffic congestion and increasing urbanisation that spoils the natural attractions of Malta. Creating more accommodation capacity risks building a bubble that will inevitably burst. This will hurt many whose livelihood depends on the industry. What the industry needs, more than anything else, is public and private investment in the infrastructure that supports tourism.

We can no longer resort to schadenfreude – ‘rejoicing’ at, and benefitting from, the geo-political problems of competing tourist destinations like Turkey, Tunisia and Greece. We need to enhance the tourist experience by promoting more cleanliness, better services in tourist resorts, less chaotic traffic systems and fewer cranes and concrete mixers, especially in tourist areas.

We may slowly be getting ourpricing right. We are also providing better connectivity, mostly thanks to low-cost airlines.

All these factors call for a genuine dialogue between all stakeholders to define long-term plans for sustainable tourism.