The Malta Hotels and Restaurants Association (MHRA) organized the BOV-Deloitte Hotel performance survey Q3 – 2023.
Michael Zarb, Policy, and Economics Advisory Leader at Deloitte Malta reported that based on an estimate for September figures that is derived from data supplied by Malta International Airport (MIA), tourist arrivals for the third quarter of 2023 are expected to exceed 1 million – surpassing the figure registered in 2019 by approximately 88,000 arrivals.
In this context, Guest nights are expected to have increased by 512,000 nights when compared to Q3 2019. The increase is in line with increased arrivals, as was registered both in collective accommodation and private accommodation.
Zarb also stated that tourism spend is expected to have reached €1026 million which is 18% higher than the comparable period in 2019, indicating strong tourism spend for this quarter.
On the other hand, occupancy levels in 4 and 5-star collective accommodation significantly dropped this quarter. This is attributed to the increase in bed stock since 2019 and the shift toward private accommodation by guests in July 2023. Indeed, occupancy in the 5-star category decreased to 80.4%, a decline of 10.1% over the same period in 2019. 4-star hotels registered occupancy levels of 87.2% in Q3, which is 8.2 percentage points below 2019 levels. Occupancy rates in the participating 3- star hotels reached 93.3% in Q3 2023.
In Q3, the 5 Star Average Daily Rates (ADR) increased by 24.6% over 2019 and reached €249.4 per room. 4-Star hotels reported rates of €156.6, a 19.1% increase from Q3 2019. Participating 3 Star hotels reported an ADR of €103.7.
Overall, Mr Zarb reported that Q3 registered a quasi-drop of 10% across all categories in occupancy. Specific reference was made to the notable increases in the payroll cost. Despite improved rates in 4-star category, net performance was below that registered last year. (For a more detailed analysis kindly refer to below)
MHRA President Tony Zahra asserted that “post-covid recovery remains stronger than originally predicted, attributing it to collective efforts. Mr Zahra acknowledged impending challenges, including overcapacity, emphasizing the need for a balance between demand and sustainable growth. He further asserted that new regulation such as the Green Deal, FIT for 55 and EU emissions directives impact Malta’s tourism sector, hence calling for a just transition. Referring to spreading conflicts in Europe and the Middle East Mr Zahra asserted that these are leading to increased costs, decrease in purchasing power for our potential tourists and disruptions in travel sentiment.
Zahra also expressed MHRA’s reservations about the “Skills card,” advocating for seamless training integration without any extra burdens imposed to an already complicated recruitment process in the hospitality sector. MHRA is currently engaging directly with the government, providing constructive feedback for effective implementation, believing responsibility for training should remain with operators to ensure the industry’s long-term success amidst evolving, overcapacity related issues, environmental norms, and geopolitical tensions.
Mr Carlo Micallef, CEO Malta Tourism Authority (MTA) presented an overview of the work currently being conducted and planned by the Authority, whilst emphasizing the levels of success which the tourism sector in Malta has managed to achieve despite the challenges being faced.