The Malta Hotels and Restaurants Association (MHRA) refers to the budget presented by Minister of Finance, Clyde Caruana, as a resounding commitment from Government to support the resurgence and expansion of the Maltese economy in the face of ongoing global economic and geopolitical challenges. Specifically, MHRA acknowledges the wide-ranging social benefit schemes.
In response to the budget, MHRA President Mr. Tony Zahra, remarked that in 2023, the tourism sector served as the driving force behind the economy, and the Minister of Finance affirmed that it is expected to retain this pivotal role in 2024. MHRA emphasizes the importance of connectivity for the industry, and therefore, the launch of the new airline on March 31st remains a crucial element for the industry’s success in 2024. While the budget caters to this new initiative, MHRA notes a reduction in the subvention for the Malta Tourism Authority.
The Budget speech however didn’t specifically mention any particular initiative in relation to Tourism, despite that tourism faces various challenges next year, especially further expansion of the tourist accommodation, which means increased efforts to expand connectivity and seat capacity. MHRA reiterates that government needs to revise tourism policy for next year and ensure that existing incentives for more hotel development are discontinued.
Furthermore, given that the hospitality sector heavily relies on human resources, the substantial increase in COLA (Cost of Living Adjustment) this year could potentially impact the industry’s profitability. To counteract this, the industry must strive for productivity gains or increase per capita spending within the hospitality sector.
MHRA appreciates the government’s intervention in the energy sector, recognizing its significance in managing industry costs and keeping inflation rates in check through subsidies.
MHRA further asserts the importance of close monitoring of public finances, ensuring good governance and accountability, given the projected deficit for next year, even though government plans to narrow the negative balance compared to this year.
MHRA reiterates its long-standing vision for the industry to enhance its product offerings, attracting higher-spending travellers to Malta. Indeed, private investments in the capital city have already attracted such discerning travellers, and MHRA now expects the government to match these substantial investments by providing both human and capital resources to enhance the Maltese islands’ infrastructure and general upkeep. In this light, MHRA express concern that the budget refers to a drop in capital and infrastructural projects.
Labour staff shortages will remain one of the biggest challenges for the sustainability of the sector and this needs long term planning, as a change in the economic model was mentioned once again, but nothing was said to put our mind at rest that our sector will have to depend on human resources. Reference to an increase in the cost for permits in recruiting foreign workers is deeply concerning since this will have a major negative impact on the hospitality sector.
MHRA also points out that nothing was specifically mentioned regarding incentives to help the tourism industry transition to meet sustainability and climate change targets.
MHRA will be commenting in further detail as the financial estimates will be made available to the Association for review.