George Micallef, president of the MHRA, has appealed to the government not to burden the hotels and restaurants sector with further costs in the next Budget, saying the industry was in no position to see its profits decrease further.
Speaking to the Times Business, Mr Micallef said: “Despite higher revenue and tourist arrivals this year, profits are down. Over the past five years we have witnessed a gradual decrease in profits. The increased utility rates, the government ordered annual cost of living increase and price hikes in fuel and gas have all affected our profits. Considering the international economic situation these increases could not have come at a worse time. We simply can’t have any more increases and we can’t pass on these increases to our customers because the tourism industry is extremely competitive.”
He added: “We do not want to be burdened by any more government induced costs. There is nothing we can do about the cost of living increase which the government gives every year but we can take no other additional costs. Even implementing new directives cost money.”
Mr Micallef said that it was crucial that when presenting its Budget next month the government signals its intention to continue working towards increasing airline seat capacity and new air routes in order to increase the number of tourist arrivals “to make up for potential losses in bed nights as a result of the unavoidable decline in the average length of stay.”
He also said it was imperative that the Malta Tourism Authority is given the same amount of funds as this year “and possibly more” as competition continues to increase. Mr Micallef also appealed for the government to continue its support of low cost airlines operating in Malta.
Mr Micallef said the MHRA has been appealing to the government for quite some time to tackle the problem of unlicensed tourism operators and is puzzled why no action has taken place, particularly in the accommodation sector.
“The Gozo Tourism Authority calculates that there are close to 2,000 unlicensed beds in Gozo and although we don’t have the figures for Malta we estimate that the number is even greater in Malta. We urge the government to deal with this situation soon. Why should law-abiding operators compete with people who do not pay licence fees, permits, VAT and tax?” he asked.
Mr Micallef criticised the fact that measures agreed to in March to help the industry to deal with the impact of the utility tariffs, such as an energy saving scheme and a subsidy of three per cent on interest on loans for refurbishment, have not yet come into effect due to “technical problems”. He urged the government to come up with alternative measures to help the sector in the next budget.
Projects promised three to four years ago, such as the embellishment of certain tourist areas, have not yet been carried out, Mr Micallef said, and this was indeed regrettable.
“The Euro-barometer survey highlights that the environment is an important factor for tourists when considering their holiday destination. We urge the government to step up its efforts in environmental rehabilitation, especially in tourism zones. We also hope that long overdue projects which were promised years ago, such as in Qawra, St Paul’s Bay and St George’s Bay will commence soon,” he said.
Mr Micallef said the MHRA was concerned about the problems affecting St Julians and Paceville which were “gaining a reputation for being a rowdy and out of control area at night”.
“The government needs to take the lead together with the other stakeholders to find ways of effectively managing this area,” he said.
The MHRA president said the association was asking the government to introduce fiscal incentives in the Budget to boost domestic tourism in order to increase hotel occupancy especially in the lean months.
“Malta has one of the lowest shares of domestic tourism in the EU. It is also about time tourism statistics highlight the contribution of domestic tourism so that whatever decisions are taken to support this sector are based on precise and correct information.”
Mr Micallef said the MHRA supported the restructuring of Air Malta and recognised the airline’s very important contribution to the tourism industry, which accounts for 50 per cent of seat capacity. He appealed to the government to keep the association informed about the discussions underway with the EU on the future direction of Air Malta.
“We need to be informed about the discussions that are going on regarding Air Malta’s future. We need to know what is happening,” he said.
Mr Micallef said the MHRA believed privatisation was not the solution to Air Malta’s problems.
He said the MHRA will soon be holding discussions with the government on a replacement for the proposed bed tax which never entered into force due to technical difficulties.