When presenting the survey results for quarter 3, MHRA’s recently appointed President Mr George Micallef, explained that against a backdrop of decreasing arrivals, shortening average length of stay, fewer guest nights and a lower tourist spend, hotels results for the summer months were inevitably below 2008 on all fronts, and that the industry went from one of the best years to one of the worst.

On a slightly positive note, Mr Micallef pointed out that a degree of comfort may be sought from the fact that the pace at which tourist arrivals and guest night generation were tumbling in the first six months of the year would appear to have eased off slightly, raising hopes that we may be approaching the bottom of the slide.

Mr Micallef was quick to point out that ‘stemming’ the volume slide is only the first step in a predictably difficult uphill struggle which will inevitably be thwarted by the lingering effects of the losses suffered over the past 12 months together with the inherent difficulties of re-building rates back up to the levels they had reached before the crash.

In quarter 3, occupancy levels fell by between 5% and 6% in the 3 and 4 star categories but increased by 2% in the 5-star category. The occupancy losses remain far more pronounced on a year-to-date bases the losses, especially in the 3-star category.

All three main hotel categories registered declines in Average Achieved Room Rate for the quarter, with the most significant losses being reported in the 5-star category. In the 4 and 5 star categories, the drop in achieved room rate in quarter 3 was more pronounced than it had been in the first six months of the year.

The combined effect of lower occupancy rates and lower achieved room rates resulted in significant decreases in accommodation revenue per available room.

Declining revenue pushed hoteliers to home in on their cost base in order to try and curtail escalating losses. This initiative led to the material reductions in payroll and overheads costs.

The declines in revenue far outweighed the achieved cost savings and gross operating profits per available room fell in all three categories.

Notwithstanding the negative results registered to-date, Mr Micallef concluded that: “The MHRA remains confident that although 2010 will undoubtedly remain a very challenging year, a correct seating capacity strategy coupled with appropriate marketing initiatives will lead to a reversal of the declining trends. However, I appeal to Government to ensure that until then, no further increases are imposed on tourism activities and for it to give particular attention to this industry, which can be the key to a rapid economic recovery. At this stage any further increases in the operating costs like those just announced for the utility rates, are simply unsustainable, and will jeopardize the very existence of the enterprise, especially the small operators.”

Mr Micallef also stressed that: “This is a time to remain focused with particular attention being given to seat capacity strategies, supporting Air Malta, effective and cost effective marketing, basic product fundamentals, tourism zones, brand image and identity, effective use of market intelligence and access to funding.

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