Local hotels lost an estimated €2 million when online travel agency Low Cost Travel went into administration two weeks ago as hundreds of tourists already in Malta were left scrambling for alternative accommodation.
George Micallef, from theMalta Hotels and Restaurants Association, told the Times of Malta that hotels in Malta – ranging from two to five star establishments – had been hit hard by the collapse, as had some local agents, although it was unlikely that any hotels would be forced to close as a result.
Mr Micallef said exact figures were still being determined but added that the amounts due were “quite significant”.
He called for the Malta Tourism Authority’s overseas office to keep abreast of developments in other countries to be able to immediately inform local operators of any news that could be of interest to the local trade, in the hope of mitigating the damage in case of such situations repeating themselves.
“The MTA could also ensure that tour operators are not paid any marketing support if the indications from the trade are that they have fallen behind in their payments locally because this may be a sign of financial difficulties,” Mr Micallef said.
MHRA officials have previously warned that hotel operators were bracing themselves for the possibility of other agencies following Low Cost Travel into bankruptcy, in part due to the financial upheaval following last month’s Brexit referendum.
The collapse of Low Cost Travel hit an estimated 27,000 tourists already abroad in several European countries and a further 110,000 who had booked but not yet travelled, according to the company administrators.
Hotel operators are out of pocket for all guests who booked through the agency over the last few weeks, with only slim hopes of claiming the money from Low Cost Travel, which had not passed on payment before going into administration.
Some local hotels are not even in a position to file claims with the appointed administrator because their contract was with a local agent rather than Low Cost Travel itself.
Guests in Malta have had to pay the fees themselves, hoping to reclaim it from travel insurance or their credit card providers while those who have booked but not yet travelled have had to rebook at significantly higher rates.