Malta Hotels and Restaurants Association said that results for Q2 show a shorter average stay, a price driven market, an extremely late booking situation, and a continued decline in non-accommodation income in all hotel categories.

The Malta Hotels and Restaurants Association has presented the results obtained in the tourism industry in Quarter 2 of 2011. In its statement MHRA said that the results continue to underline a changing pattern – a shorter average stay, a price driven market, an extremely late booking situation, and a continued decline in non-accommodation income in all hotel categories.

“Q2, and even Q3 are showing a clear slowdown as expected, when compared to the increases registered in Q1. This is linked to a drop of around 5% in seat capacity this summer, though improvements in load factors are making up for this drop in seats,” the Association said.

“Although rates in 2011 are improving, they are still below the levels registered in benchmark years of 2007/2008, when costs were also significantly lower. Only through further growth can Malta realistically expect to push rates up and counter the pressures caused by a steadily declining average length of stay. The MHRA however is encouraged by the steady growth in arrivals since 2009.”

“The positive trends and steadily improving results achieved over the past eighteen months are directly linked to the ability of the Malta Tourism Authority to stimulate increased demand by increasing available seat capacity. This was supported by Air Malta and other airlines during the particularly challenging global economic climate. The wisdom of those bold decisions are unequivocally supported by the increase in tourist expenditure of €111 million in the first six months of this year compared to expenditure levels in 2009. This figure is expected to more than double by the end of this year. Furthermore, the overall per capita tourist spend has increased by 2% for the first 6 months of the year.”

MHRA said that “one would dread to imagine where our economy would be had it not been for the substantial incremental inflows into the economy generated by the strong rebound in tourist arrivals registered over the said period. There is no doubt that Air Malta played a major role in all of this, a role which must be retained. However the reality is that changes in the way the product is distributed are taking place in the industry and low cost airlines are a reality, which needs to be accepted by all stakeholders. MHRA appreciates the significance of the difficult decisions that need to be taken, but feels that delays in taking certain important decisions will only come back to haunt us.”

“In this respect the MHRA believes that the Malta Tourism Authority should be immediately empowered to continue to support increased seat capacity from underserved markets, whilst carefully nurturing Air Malta to sustainable commercial pastures as both are a must for the long term sustainability of our tourism industry,” MHRA continued

MHRA said that it “appreciates that Air Malta’s restructuring is an elaborate process which needs to take its pace and that its outcome cannot be predetermined, but this should not stop government from setting clear targets for tourism next year, given the huge influence tourism has on the economy. Air Malta, will no doubt play a huge role in the targets for next year, but given that we now have the flight schedules determined, we should set targets, see how Air Malta fares in these plans and work towards filling the gaps as necessary within the prevailing circumstances.”

“There is no doubt that next year will be a tough year for most European countries’ economies including Malta, and all stakeholders have to work harder, not just in terms of ensuring accessibility and seat capacity to Malta. Remaining competitive remains key and we need to find ways of improving it,” the statement said.

“In the background of the recent downgrade by Moody’s, MHRA is of the opinion that the tourism industry can prove to be a substantial part of the solution to restore pre-recession economic growth rates. It is empirically proven that tourism benefits the economy with the highest multiplier, which in turn can have significant impacts on government revenue. Given that we are now in the budget process, we will therefore continue to urge Government to continue its support to tourism, as this can be a key to accelerated economic recovery.” The President George Micallef concluded saying.

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