The Budget has again failed to tackle the problem of unlicensed accommodation, which is estimated to be worth the conservative figure of about €24 million a year, according to the Malta Hotels and Restaurants Association.

This sector continued to grow from year to year at an alarming rate and if the government tackled this issue it could benefit from another source of revenue, which in turn could be reinvested in the tourism industry, the MHRA said.

“It would also give a signal that government will no longer permit this situation. But as things stand, illicit trading is being encouraged.”

It stressed that tourism could be a key for economic growth next year but that in view of the bleak global economic outlook and the uncertainties linked with Air Malta, the challenges will be greater.

To this effect, it said, the additional €1 million allocated to the Malta Tourism Authority would not be sufficient to meet these challenges and make up for the likely shortfall next year.

“Tourism is one of the sectors that deliver and which contribute to government earnings handsomely,” it said. The industry’s value added for the economy was very significant and the MHRA expected that in these particular circumstances the government would have invested more to sustain the momentum of economic growth registered to date in tourism.

It hailed the €20 million allocated to Air Malta as an important sign the government was committed to support the “indispensable national airline”. However, the government could no longer allow the restructuring process to remain pending indefinitely, as this uncertainty was negatively affecting tourism prospects, it said.

MHRA said it was pleased to note government “did not burden the tourism sector with any additional taxes or charges” and was looking at ways to control the inflation rate next year.