Despite recovery, hotels are reporting lower profits due to rising payroll and inflationary costs

On a cumulative basis, tourist arrivals for the first six months of the year reached 75 per cent of 2019 levels, almost matching the same length of stay as in 2019.  

This information was presented as part of the Malta Hotels and Restaurants Association’s (MHRA) on BOV Quarter 3 2022 Hotel Performance Survey as prepared by Deloitte at SeaView Hotel, Bugibba.   

Indeed, the survey reveals a general positive trend of recovery for the first six months of this year across the Maltese hospitality sector.  A closer analysis however reveals that despite a registered increase in revenue, the GOP dropped, reflecting the rising costs in payroll and inflationary costs.

In this light, MHRA President Tony Zahra stated that, “such recovery is not only reflective of the resilient nature of the tourism sector but also reflective of the collective efforts made by all stakeholders including the Ministry of Tourism, the Malta Tourism Authority, AirMalta, the Malta International Airport, and the MHRA members.” The Deloitte survey highlights that as global economies started to bounce back from the pandemic over the past six months, Malta has been successful to turbocharge its tourism and hospitality sector once more through also unconventional and innovative investment strategies, Mr Zahra added.

He however also remarked that “to further realize and sustain growth, investments should systematically cover the entire ecosystem – from destination readiness to tourist engagement in source markets; from distribution to regulations and human capital development.”  Mr Zahra stated that tourism stakeholders should consider new ways to reorient the next wave of investments to achieve sustainable growth. In this context, he referred to the restructuring programme which AirMalta is currently going through and reiterated MHRA’s mantra that the national flag carrier must keep flying. From a wider perspective, the MHRA President emphasised that, “more connectivity is needed to reach 2019 arrival levels.”

He stated that the challenges are not yet over, and that the war in Ukraine has led to a global crisis namely in energy and food supplies. Accordingly, Mr Zahra commended Government’s vision reflected in the National budget by investing a further €600 million to support families and businesses alike in facing such challenges, ensuring stability and support for further potential sustainable economic growth. 

Carlo Micallef, Malta Tourism Authority CEO also addressed the seminar and highlighted the latest initiatives and marketing strategies which the Authority is currently spearheading. Mr Micallef remarked that MTA is anticipating that close to 2.2M tourists will visit Malta and Gozo, with Air Seating Capacity reaching up to 5.4M by the end of 2022.

Mr Micallef added that that majority of airlines which operated in Summer 2022 will continue into Winter 2022/2023. Air Serbia is to restart operating to Malta and direct flights to Stockholm will recommence by Ryanair. Mr Micallef concluded that Emirates will start operating daily flights as from this Winter too.

During the panel discussion, Mr Clint Flores, Head of Environmental Sustainability and Governance (ESG), at Bank of Valletta stated that “There is No Planet B. We need Sustainable towns and cities”.