Tourism operators may be seeing signs of a reversal in the downward trend but after suffering the worst battering in years it will take "a lot of hard work" to see the industry through the next two years, a consultant has warned.
Raphael Aloisio, a partner at consultancy firm Deloitte, said yesterday the sector was still in "dangerous waters" but there were consistent positive arrival figures towards the end of 2009. The problem, however, was that room rates were still very low, impinging negatively on hotel income levels.
Presenting the Malta Hotels and Restaurants Association Hotel Survey for the last three months of 2009, Mr Aloisio said the negative trend in tourist arrivals had started as early as mid-2008 and persisted throughout 2009. However, the drop started to slow down in the second half of 2009 with some positive figures appearing in the last three months.
"There is no doubt 2009 was a very bad year. It is behind us but the impact of the losses incurred will be carried forward to 2010. It will not be prudent to expect miracles overnight and it is going to take a lot of hard work by all to see the industry through the next 18 to 24 months," Mr Aloisio said.
The same cautious optimism was expressed by MHRA president George Micallef, who said Malta should be able to return to growth but refrained from making any solid predictions. He insisted it would be premature to do so given the fragile state of the industry.
"The recovery has begun but it will not be easy. The market is still very price-sensitive and it will take time for hoteliers to recoup the losses they experienced in 2009," Mr Micallef said.
While praising the government and the Malta Tourism Authority for issuing assistance schemes to help hoteliers upgrade their product, invest in marketing and ease loan repayments, Mr Micallef said the cost of higher water and electricity bills would continue to weigh heavy on the industry.
He called for a thorough analysis of the country's bed stock and the drawing up of a long-term accommodation strategy to ensure an adequate mix that followed changing trends in the industry.
Mr Micallef said Malta had to target a minimum growth of 250,000 tourists to reach levels seen in previous years but insisted it was highly unlikely the target would be met in 2010.
Last year, hotels witnessed a drop in revenue of €54 million and saw profits slump by €29 million.
Major source markets such as France, Germany and the UK experienced significant drops in arrivals. However, Italy maintained a positive trend.
Room rates for five-star hotels were only marginally higher than 2006 levels while four- and three-star hotels saw marginal drops in room rates but were hit hard by a drop in volume.
The level of spend on non-accommodation services in hotels also dropped significantly in the five- and four-star categories, while three-star hotels saw tourists spend more money on ancillary services in their hotels.
Hotels collectively spent less on wages as they employed fewer people to mitigate costs.