The president of the MHRA warned today that the tourism industry faced the real risk of operators scaling back or cancelling their operations because of Air Malta capacity cutbacks and uncertainty.
"Our major concern now is Air Malta and the related seat capacity issue for next year. The tourism industry has never faced a bigger challenge than that being faced at present," George Micallef said.
Speaking at a conference during which the association gave its latest occupancy figures, Mr Micallef observed that Malta had already experienced serious cutbacks, a major one being the 38,000 seats which Air Malta cancelled on the UK market.
"This decision was taken nine weeks ago and we have since not managed to replace a single seat. Neither are we aware of being anywhere near to substituting any of this lost business with other airlines. The UK has traditionally been the single most important source market for us and the affects of such a steep reduction is very serious if not countered! We have a number of tour operators, especially the Malta specialists, not knowing if seats will be available, and if they do, at what cost. The problem is that they cannot afford to wait for too much longer, and there is the real risk that they either drastically scale down their programmes or cancel their operations altogether.
"There is also the risk that some of these may buy the seats off the low cost carriers and package them, in which case we will lose out on the potential of these seats being taken up by the independent traveller. "
It was frustrating, Mr Micallef said, that the MHRA and other stakeholders were being left in the dark about what was happening at Air Malta.
"We cannot afford to wait for a rescue plan to be devised and than call in the Malta Tourism Authority to fill in the gaps, as time is against us. The expertise of the appointed consultants who appear to be heading Air Malta at present, is certainly not in question here, but the expertise in airline restructuring alone is not entirely sufficient, as we also need the input and expertise of the local tourism industry’s stakeholders."
In his speech, Mr Micallef said that while arrivals so far this year had matched those of 2008, which were a record, profitability was 15% lower than 2008. He said that almost a quarter of the increases in accommodation income was beign eradicated by the utility costs. All this, he said showed how difficult it was for hoteliers to recover the 2% VAT increase imposed in the Budget.
The third quarter figures issued today showed five-star hotels having had an occupancy level of 84%, four star at 90% and three star at 37€.
Despite this growth, Mr Micallef said room rates remained below 2008 levels.