The Malta Hotels and Restaurants Association said today that the increase in utility tariffs announced by the government would be difficult to sustain.

"The international economic climate is far from encouraging and the industry was already bracing itself for a downturn in business levels due to reducing traveller numbers," the association said.

"With the original proposals put forward by the government, hotels would have faced an increase of 56% in their utility bills, an increase that would have put many hotels into a position where their operation was no longer sustainable.

"Following the various meetings that took place and specifically the government’s reduction of €60 million from its original expectations, this impact has now been reduced to an average increase across the industry of 12% in the first year and a further 7% in each of the following two years.

"This reduction was achieved without placing any extra burden on other consumers."

"Over the next three years, if oil prices remain as they are, hotels will collectively pay over €5 million more for their electricity however this cost is going to be borne mainly by the larger hotels in the four and five star categories."

The association said it was critically important for all concerned to focus on how the Island was going to deal with the international economic downturn.

"The downturn could effect us very negatively and we all have to work together to ensure that we minimize the effect it has on our economy, our jobs and our livelihoods."

It again urged the government to consult the nation's stakeholders before such drastic measures are implemented in the future.