Hotels and restaurants are set to benefit from schemes to finance investment in alternative energy as a means to cushion the hike in utility rates.

Tourism Parliamentary Secretary Mario de Marco said that, rather than subsidise the impact directly, the government was working on special schemes to help hotels and restaurants invest in reducing their water and electricity consumption.

But Dr de Marco stopped short of revealing details of the agreement reached with the Malta Hotels and Restaurants Association, saying they were still being finalised. He said he hoped to make an announcement in the coming days.

When contacted, MHRA president George Micallef said the new utility tariffs cost restaurants an additional €1.8 million and hotels would have to fork out an extra €7.5 million. He said the details of the agreement still had to be ironed out, especially on the type of mitigation measures and whether these would be one-off or stretched over a period of time.

Together with the drop in tourist arrivals and the increasing operating costs, the new utility tariffs - that came into effect on January 1 - would lead to particular sectors of the tourism industry becoming unsustainable, Mr Micallef told a conference on the restaurant sector earlier this week.

Prior to their introduction, the association had warned that the increase in energy prices would result in job losses.