Results obtained in a tourism industry survey for the second quarter show a shorter average stay, a price driven market, an extremely late booking situation, and a continued decline in non-accommodation income in all hotel categories.
Presenting the results of the survey this afternoon, the Malta Hotels and Restaurants Association said the second and even the third quarter were showing a clear slowdown when compared to the increases in the first quarter.
This is linked to a drop of around five per cent in seat capacity this summer, though improvements in load factors are making up for this drop in seats.
“Although rates in 2011 are improving, they are still below the levels registered in benchmark years of 2007/2008, when costs were also significantly lower.
“Only through further growth can Malta realistically expect to push rates up and counter the pressures caused by a steadily declining average length of stay.
“The MHRA, however, is encouraged by the steady growth in arrivals since 2009, it said.
MHRA said that the positive trends and steadily improving results achieved over the past 18 months were directly linked to the Malta Tourism Authority’s ability to stimulate increased demand by increasing available seat capacity.
This was supported by Air Malta and other airlines during the particularly challenging global economic climate.
The wisdom of those bold decisions were unequivocally supported by the increase in tourist expenditure of €111 million in the first six months of this year compared to expenditure levels in 2009.
This figure is expected to more than double by the end of this year.
Furthermore, the overall per capita tourist spend has increased by two per cent for the first six months of the year.
Air Malta played a major role in all of this, a role which must be retained
The MHRA said there was no doubt that Air Malta played a major role in all of this, a role which must be retained.
However the reality is that changes in the way the product is distributed are taking place in the industry and low cost airlines are a reality, which needs to be accepted by all stakeholders.
“MHRA appreciates the significance of the difficult decisions that need to be taken, but feels that delays in taking certain important decisions will only come back to haunt us.”
MHRA said the MTA should be empowered to continue to support increased seat capacity from underserved markets, whilst carefully nurturing Air Malta to sustainable commercial pastures as both are a must for the long term sustainability of our tourism industry.
It said that Air Malta’s restructuring was an elaborate process which needed to take its pace and that its outcome could not be predetermined, but this should not stop the government from setting clear targets for tourism next year, given the huge influence tourism has on the economy.
“Air Malta, will no doubt play a huge role in the targets for next year, but given that we now have the flight schedules determined, we should set targets, see how Air Malta fares in these plans and work towards filling the gaps as necessary within the prevailing circumstances,” MHRA said
It said that in view of the recent downgrade by Moody’s, the tourism industry could prove to be a substantial part of the solution to restore pre-recession economic growth rates.
“It is empirically proven that tourism benefits the economy with the highest multiplier, which in turn can have significant impacts on government revenue.
“Given that we are now in the budget process, we will therefore continue to urge the government to continue its support to tourism, as this can be a key to accelerated economic recovery,” MHRA president George Micallef said.