The MHRA’s budget proposals are primarily aimed at ensuring that Malta remains competitive and that accessibility and airline seat capacity is maintained and further developed next year. These two factors are fundamental for the sustainability of the tourism industry, as the industry and indeed the economy, cannot afford a drop in occupied bed nights or tourism expenditure.
Rising costs and lower profitability have been a major concern for the hotels and restaurateurs in recent years, and the MHRA has purposely conducted an economic impact report that clearly demonstrates this pattern. The report also shows that Malta has the lowest levels of profitability amongst competing destinations. The MHRA is proposing that no government induced costs are further introduced in the forthcoming budget, as the industry cannot continue to absorb further increases. Profitability is not only necessary for the very survival of the businesses but also for further investment in the tourism product, which is vital if we are to compete successfully.
MHRA is stressing the importance of extended support to airlines to maintain accessibility and possibly increase seat capacity as well as new routes. This is becoming increasingly critical, given that Airmalta may be constrained to scale down or cancel its operations from established routes next year, and one should not underestimate the far reaching implications of such decisions. The same applies to the funding and support given to MTA, as the need for increased presence in the market continues to grow with the introduction of new routes and stiffer competition.
The MHRA recognises that the process of on going discussions with the EU affecting the future of Air Malta is a delicate one, however it continues to emphasise the need that the main stakeholders are kept abreast of decisions taken, in order that measures to mitigate any adverse affects are put in place at the earliest stage. This may also require a contingency fund provision in next year’s budget.
The MHRA has also made other proposals, amongst which, is calling upon government to tackle the problem of unlicensed operators particularly in the accommodation sector so as to bring to book all those that get away with not paying licences, permits, VAT, taxes, etc, whilst competing unfairly with the rest of the law-abiding operators in the industry. This will also help boost revenue for government.
The MHRA is also urging government to find alternate ways to provide grants to finance green technology investment schemes for the hospitality industry, as per agreement reached last March, to mitigate the impact of the rise in the utility rates, which will help restore some of the lost cost-competitiveness.
Malta Hotels and Restaurants Association