Major hotels appear to have come close to reaching the desired guest numbers as hoteliers report high occupancy rates for August but are resigned to lower revenues from the peak season.
Winston J. Zahra, whose Island Hotels Group comprises the Radisson Blu Resort in St Julian’s, the Radisson Blu Resort at Golden Sands and the Coastline Hotel, was upbeat about August occupancies.
“We expect to close August with very high occupancies in all three hotels and within the same parameters as last year,” he told The Times Business.
“In as far as the overall performance is concerned, we expect to have similar year-on-year results at the Golden Sands, better year-on-year results at the Coastline, and slightly weaker year-on-year results at the Bay Point due to the very aggressive rate competition in the St George's Bay area.”
Asked about his outlook for the rest of the summer, Mr Zahra said much depended on the late booking market with many hotel rooms being sold much later than they used to be sold traditionally.
“Within our group we have a slightly mixed bag with the Golden Sands and Coastline forecasts showing strong positions for the rest of summer and the St Julian's figures remaining very dependent on last-minute pick-up due to the lack of conference business this year and the overall drop in rates in the area,” Mr Zahra explained.
“All stakeholders have to continue to work very closely together to ensure that we give the best possible exposure to our island, ensure that the flight capacity we need is retained and if possible improved, and that our overall product offering is given the constant attention it deserves."
Ian De Cesare, chairman of the Eden Leisure Group, said occupancy at the group’s Intercontinental Hotel in St Julian’s will be higher than in August 2008 and described occupancy as “pretty good”.
“Rates are still somewhat weaker than usual, but that is a reality all over the world,” he pointed out. “Whether the occupancy will translate in better profitability is a different story. We will have to ride out the summer and then work to build up our rates again and getting the overall occupancy back.
“However, on the whole, since June, occupancy has been better than last year. It is still difficult to make forecasts and we are working from fortnight to fortnight.”
Despite reporting occupancy hovering around 80 per cent, AX Group’s director of hospitality Claire Zammit Xuereb was not as optimistic about the season.
“There is a flow but bookings are still very last minute,” Ms Zammit Xuereb said. “Occupancy stands at around 80 per cent when usually it is over 90.”
AX Group’s hotels include The Palace and The Victoria, the Sunny Coast aparthotel and the Seashells Resort at Suncrest, Malta’s largest four-star property.
“The last week of August looks like it will be a struggle,” Ms Zammit Xuereb warned. “Summer is not happening. We used to have a problem because we used to be full to capacity at this time of the year and could not accommodate bookings. That problem does not exist any more. Hotels make money in the summer and that helps to compensate for slower business in winter. If things carry on like this throughout this season, we are going to struggle for cash flow in the winter.”
Malta Hotels and Restaurants Association president Kevin De Cesare said that feedback from hoteliers indicated that during the first three weeks of August, most have managed to fill up although they had to lower rates in and also devise special offers.
“The last two weeks of August are still weak, but hoteliers are optimistic that they will catch some business due to the present late booking trend,” Mr De Cesare pointed out, adding that the trend made it difficult to predict what the rest of summer held in store.
The MHRA’s monthly survey showed bookings in hand were “very much lower” than the final figure obtained last year.
“During July and August, hoteliers managed to pick up bookings and we are optimistic that the trend will continue in September. October is too far away to predict occupancies.”
Were hoteliers confident of reaping some profit from this season?
“Profits will definitely be considerably down this season due to weaker rates and lower occupancies,” Mr De Cesare stressed. “During the first quarter all categories of hotels suffered losses. Some will generate some profit and some better than others. One must look at financial commitments that some hotels may have to see if the profit generated will be sufficient. This coming autumn and winter will be crucial that Malta gets its fair share of the market. At this stage, we have precise information on Q1 only.”