The latest market barometer carried out by PwC Malta shows a level of anxiety in the local hotel industry in the wake of possible repercussions due to Brexit. Twenty-six per cent of hoteliers have, in fact, identified Brexit as their topmost concern.

The barometer shows that plans for capital investment are less upbeat than those express­ed in 2015, arguably as a consequence of the decision by the UK to leave the EU following the referendum held in June 2016.

Kevin Valenzia, Territory Senior Partner at PwC Malta, said that although the industry is anticipating a strong performance during the first six months of 2017 due to Malta’s EU presidency, the results of the barometer highlight and remind all stakeholders of the increasing sensitivity of the local economy to global events.

The barometer, which considers the views of around 30 hotels and 100 restaurants representing the respective three-, four- and five-star category and geographical areas, was conducted over telephone during October and November of 2016, following the summer busy period.

Participants in this market exercise were interviewed on their plans for capital investment and recruitment in the forthcoming six months. Thirty-seven of hoteliers indicated plans for capital investment. In 2015, 46 per cent had such investment plans. Restaurant owners’ sentiment appears to be more consistent with the prior year with 38 per cent having favourable investment plans – a marginal increase from 36 per cent in 2015. Geographically, restaurants in Valletta and St Julian’s are the most upbeat.

The outlook for the next six months is most favourable among five-star hotels

Recruitment plans across hotels and restaurants are more favourable when compared to 2015. Fifty-eight per cent of the hotels participating in the barometer (compared to 44 per cent in 2015) plan to recruit staff in the next six months. This is consistent with the plans of restauranteurs – where 62 per cent, as compared to 46 per cent in 2015, plan to recruit more staff.

The outlook for the next six months is  most favourable among five-star hotels, with 86 per cent indicating a favourable outlook ahead of the forthcoming six months, largely as this coincides with the period during which Malta will hold the EU presidency. This compares with a 74 per cent industry average, which in 2015 stood at 85 per cent.

Restaurant owners’ positive outlook appears to have increased in 2016 – with 71 per cent indicating a favourable outlook when compared with 68 per cent in 2015.

Restaurants in Valletta and St Julian’s appear to the most buoyant – where 83 per cent and 85 per cent respectively are anticipating favourable business prospects in the coming months. This contrasts with the feeling expressed in Gozo – where only 36 per cent of the restaurants participating in the barometer indicated a favourable outlook.

Recruitment of staff continues to be the top business concern for hotels.

Thirty-seven per cent of the hotels interviewed shared this as their foremost top concern. This is lower than that stated in 2015, when the concern was more widespread – at 53 per cent. This is consequential of the apprehension Brexit is having on the local industry in 2016. In this barometer, 26 per cent of the hoteliers indicated Brexit as their topmost concern.

Other concerns for hotels in the 2016 barometer are the presence of unlicensed accommodation, indicated by 11 per cent of the sample interviewed, and the attractiveness of the islands during the shoulder months. Restaurants appear to have the same concerns as in 2015. Sixty-three per cent of those participating in the barometer feel that the labour market is short of personnel who are willing to pursue a career in the hospitality industry. Other concerns express­ed are the incidence of VAT and utility costs.

Hoteliers and restauranteurs were asked whether enough enforcement is being done to curb unlicensed operators. Sixty-seven per cent of hoteliers stated that the authorities should step up their efforts – as compared to 15 per cent who are of the opinion that sufficient enforcement is in place.

Restaurant owners, relatively, appear to be less sensitive to the issue – with 40 per cent considering that the level of enforcement is adequate. Only 38 per cent appear to be soliciting the authorities to ramp up enforcement – with the remainder being unsure.

The barometer also addressed the widespread industry concern on the availability and suitability of resources in the market to service the industry. Sixty per cent of all participants in the barometer stated that authorities should step up their efforts so that hospitality is seen more to be a long-term compelling career.

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