MHRA, “Restaurant Operators End 2022 With Positive Outlook”

Challenges such as inflationary costs including food and labour costs, and supply chain shortages – negatively impacting operations according to survey.

The Malta Hotels and Restaurants Association (MHRA) has today presented the BOV Deloitte Restaurants performance results for the Year 2022 along with the outcome of a Diners Sentiment Analysis from across the Maltese islands sponsored by ProKitchen.

Deloitte Financial Advisory Partner, Mr Raphael Aloisio reported that the survey results show a reasonably strong rebound for all restaurant categories. Although 73% of survey participants reported increased revenue when compared to 2021, 54% have still not yet recovered pre-covid pandemic revenue levels. In addition to the unavoidable challenges related to recovering lost revenue, most operators across the board reported significant increases in both payroll and other operational costs. Encouragingly, 67% of respondents are expecting a more positive 2023, with the least optimistic establishments being those based in Gozo and the Southern region of Malta whilst operators in the Central region were the most positive.

Andre Agius, Managing Director of ProKitchen stated, “Our company is used to delivering value to its clients by providing professional catering equipment and technical support to hotels and restaurants. This year we are adding an additional layer of support to our clients by presenting research that focuses on the dining habits of the public in Malta and Gozo.”

“This is an additional tool that will give the catering sector the ability to navigate the market, especially in moments which are still challenging and uncertain. It also gives our team the opportunity to highlight specific insights to our clients, based on their type of operation.”, said Mr. Agius.

“Restaurants are the cornerstone of our communities we serve, and for the hundreds of employees who come to work in our industry every day, the opportunities for a life-long career are limitless,” said MHRA President Tony Zahra. “We’re proud to be an industry where you can start your career as a dishwasher and cap it off as an owner. One, however, must be conscious that the restaurant business scene is changing fast and therefore needs to adapt to changes by being innovative and creative to meet the needs of the most discerning diners. Towards this end Mr Zahra pledged that MHRA will continue to be the main partner of restaurateurs to sustainably grow a sector which is critical for a successful tourism sector and a modern society. “MHRA has been there for our restaurants and together with Government we have made sure that this sector will not extinguish during the pandemic years.

MHRA President Tony Zahra stated that, “Now that we are facing recovery, we need to work harder to help our restaurants raise the bar in offering a holistic quality experience to diners. We also need to work hand in hand with Government to where possible keep sustaining the sector to address the extraordinary rise in costs experienced at in international level as it happened in the energy sector and continue addressing the issues related to recruitment of staff. When facing such challenges, typical operators don’t have much margin for error. With major input costs escalating, they can make changes to align with local consumer demand while realigning operations for longer term growth.” Mr Zahra also said that MHRA as the representative of the restaurants sector in the Maltese islands is excited to keep working with stakeholders so even more people can join our community that is committed to serving employees and guests.

“We will continue working hand in hand with the hospitality industry to ensure that the continuous development of our tourism product remains at the forefront. This ranges from infrastructural improvements and higher levels of food handling and hygiene to a more flexible sector which adapts to the changes in the market. The attraction of greater quantities of independent tourists has nurtured huge opportunities and increased business for the local catering industry. Therefore, we need to continue striving to induce even more expenditure and activity in this regard,” outlined Minister for Tourism Clayton Bartolo in a message delivered to the restaurateurs.

A workshop was also organised for attendees by executives from the Department of Industrial and Employment Relations (DIER) who explained the law in a simplified manner and addressed case studies and specific situations. This workshop was held in collaboration with the Gozo Tourism Association and the Malta Tourism Authority.

Ben Vincenti cofounder and COO of Bookia gave a presentation about the benefits of forming part of this MHRA supported booking portal for restaurants.

MHRA Restaurants Survey by Deloitte – Key Highlights: 2022

Overview

A total of 70 restaurants across Malta and Gozo participated in the MHRA BOV Restaurant survey covering the performance of the restaurant sector during 2022. In terms of typology the vast majority (57%) reported that they operate a casual diner/trattoria type of establishment followed by fine dining restaurants (19%) and cafes and cafeterias (13%).
In terms of overall revenue only 17% of respondents reported that their revenue originated from takeaway and other food delivery services. The vast majority of respondents originated from casual or fine dining establishments.

Revenue

When compared to the pre-covid pandemic period i.e. 2019, almost a third of respondents reported improved revenue whilst 54% stated they had lower takings.

When one compared the revenue of 2022 against the income in 2021, 73% of respondents reported improved revenue and only 15% reported lower takings.

Operational Costs

When compared to 2019 payroll costs. 52% reported a decrease in wages and 77% reported higher operational costs.

When compared to 2021, payroll and other operational costs followed the ongoing upward trend with payroll costs increases being reported by half the respondents.

Payroll Costs vs. 2019

Other operational Costs vs. 2019

Business sentiment 2023

Notwithstanding the increase in overall operational costs, 67% of respondents expect a positive year in 2023 and only 8% stating that they expect a poor outcome.

When a regional segmentation is taken into consideration, the least optimistic establishments are those based in Gozo and the Southern region of Malta. Only 17% of respondents on the sister island replied they anticipate a positive year in 2023.


About the Mediterranean Observer

The Mediterranean Observer is a news portal dedicated to travel tourism, and hospitality in the Mediterranean region. This portal is managed by the Mediterranean Tourism Foundation, based in the Mediterranean country of Malta.


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