Hotels report strong 2024 so far, optimistic about a very busy summer

Many of Malta’s top hotels are reporting that 2024 is shaping up to be another great year for the hospitality sector, as the strong tourist arrivals reported in the first few months of the year are being matched by similarly high bookings for the summer season and beyond.

Coming right after a record-breaking 2023, when around 3 million tourists visited Malta, the first three months of 2024 saw double-digit growth in arrivals.

Although flight delays and cancellations are not quite so common as they were in late 2022 and throughout 2023, the air travel industry remains in flux, with troubled major manufacturer Boeing missing delivery deadlines and industrial action, not to mention geopolitical uncertainty, disrupting flight schedules and shaking travellers’ confidence. All of this meant that the overwhelming shift to a preference for last-minute reservations has, until recently, remained noticeable – but does this still characterise the industry in 2024?

The rising number of tourists comes alongside the opening of several new hotels, and expansions of existing ones, that had prompted industry stakeholder to raise the alarm about possible cuts to room rates and low levels of occupancy.

The outcome, according to industry experts, is likely to be a natural selection of the fittest to survive, with higher quality establishments able to offer decent prices holding an edge over those without a unique service proposition.

Andy Tanti, general manager at The Londoner, says the recent opening of both the firm’s hotels precludes making any direct comparison to the previous year’s figures, but confirmed a “positive outlook” for the summer.

“We opened our Sliema hotel in June 2023 and the one in St Julian’s in November 2023, so we cannot really compare business to last year,” he says. “What I can say is that, generally, reservations are very last minute; at St Julian’s more than Sliema.”

He says that while there is “a sense of stronger demand” in Sliema, St Julian’s “still seems to be a bit weak.”

Mr Tanti is not worried though: “We have a positive outlook for summer. I’m sure if we have another conversation in October or November, I’ll say it was a very positive summer.”

Gozo’s Kempinski Hotel owner Janice Baldacchino says that from June onwards, 2024 is exceeding the company’s expectations: “When compared to last year, and even to the forecast we had prepared for this year, performance is going beyond what we expected, both in terms of the pace of bookings and in revenues.”

So can room rates be expected to be higher this summer? Ms Baldacchino replies: “In this day and age we operate with AI software, so yes, if there is high demand, prices will automatically be pushed upwards, generating higher ARR (Average Room Rate).”

The strong bookings being seen for the coming months is welcome, she says, after an “OK-ish” April, with group bookings falling a bit shorter than planned, whether related to small conferences or team building activities.

“But Gozo is a different animal to Malta,” notes Ms Baldacchino. “I’m sure Maltese hotels would report different results. As the only modern, recently refurbished five-star hotel on the island, we cannot collaborate with other establishments to attract larger events and conferences – that limits how aggressive we can be on group bookings.”

Over at Valletta’s Embassy Hotel – the largest hotel in the capital – bookings are ahead of where they were at the same time last year, says general manager Hubert Debono.

“So far, for the first four months of 2024 we are eight per cent better off than last year in terms of rooms revenue,” he says. “For the upcoming months of 2024, business on the books is 13 per cent more than the booking position at the same time of 2023. This is despite being five per cent down on room nights booked, as we are selling at a substantially higher rate.”

He adds that hotels in Valletta “seem to be doing exceptionally well all year round in terms of rate and occupancy.”

On whether people are still tending to book their accommodation at the last minute, Mr Debono says that only 20 per cent of the hotel’s bookings can be considered as last minute, that is, between zero and 30 days before arrival.

Meanwhile, half of the total bookings are happening between 31 and 90 days prior to arrival, with the other 30 per cent happening over three months before.

Phoenicia Hotel general manager Robyn Pratt says the Floriana hotel is “very busy” at the time of our conversation (mid-May), and the rest of the year is “shaping up very well.”

“At this stage, occupancy is a bit behind where we were last year, but our focus on rates means that revenue is comparable.”

She says the Phoenicia’s strategy, focusing on quality aiming to attract a specific market segment willing to pay higher rates – is yielding “very positive” results.

“Of coure, we then need to deliver a higher guest experience.”

Mr Pratt says the trend for last minute bookings was still the norm in 2024: “It’s even worse than last year, in that regard. The situation with flight cancellations around the world makes people more hesitant to plan ahead, and when they do, if those flights do end up being cancelled, then we get last minute cancellations.”

Interestingly, db Group CEO Robert Debono relays a different experience, saying that the pattern of last-minute bookings during the COVID-19 pandemic seems to be shifting.

“Early reservations for the summer months have been robust, indicating a reversal of this trend. Travellers appear to be booking well in advance to take advantage of early booking discounts, secure their preferred travel dates, and ensure accommodation that meets their needs and budget. Currently, opting for last-minute bookings could lead to higher costs due to reduced availability of flights and accommodations.”

As for bookings across the group’s two hotels, the db Seabank in Mellieħa and the db San Antonio in Qawra, Mr Debono says that bookings for May and June are tracking at the same level as last year, with reservations for the rest of the summer looking “equally promising,” a trend that is “expected to strengthen further as flight availability remains stable.”