MHRA have released the BOV MHRA Hotel Survey by Deloitte for the fourth quarter of the year.

MHRA President, Mr Kevin De Cesare, reported that the survey results for Q4 confirm that Malta’s tourism industry has slipped into negative growth and that local hotel operators are becoming increasingly concerned about their future prospects against a backdrop of a very vulnerable international tourism market.

All key performance indicators for the quarter were down by between 8 to 10 percentage points.

Although tourist arrivals and guest night generation for 2008 as a whole remained ahead of the previous year, the poor results registered in the last quarter of the year virtually wiped out the gains achieved in the previous nine months of the year, albeit leaving both in positive territory.

On a positive note, Mr De Cesare explained that he was encouraged by the significant year-on-year increase in arrivals registered from the increasingly important Italian, German, Spanish and French market. Cumulative these markets grew by 70,000 pax over 2007.

“Had it not been for the crippling effect of the drop of 30,000 tourists from the UK, we would have been looking at a very different picture. The growth in other markets confirms that if Malta adopts the correct ‘seat capacity’ strategy it is able to attract new business even in these challenging times. I firmly believe that the best way to defend against the challenges being faced by the industry is to go on the attack by ensuring that we maximise sustainable flight capacity to Malta, especially from presently untapped regions, including from the UK.”

In Q4 occupancy levels fell in all three main hotel categories. The 5-star sector was clearly the hardest hit as its occupancy levels fell by 14.7% on account of the drop in arrivals and the significant increase in bed-stock availability. Occupancy levels in the 3 and 4 star categories also fell by just under 8%.

Notwithstanding the drop in demand, Achieved Room rates appeared to hold until December and most hotels categories registered rates improvements in Q4, which partially offset the losses reported on account of lower occupancy levels. However, from the survey results and from feedback being received from hoteliers it would seem that things have become increasingly challenging in the first quarter of 2009 and many hotels are actually witnessing decreasing rate trends.

As a result of the lower achieved occupancy levels profitability declined in all hotel categories in quarter 4. On a year-to-date basis both the 3 and 4-star categories managed to register marginally improved operating results as compared to a 4.3% drop in GOP per available room in the 5-star category.

Mr De Cesare concluded that, “We are clearly facing challenging times ahead. It is at times like this that it becomes even more important for all tourism stakeholders to dig deep and pull together. This is not a time to sit back and ‘hope for the best’, it is not a time to point fingers and attribute blame. To succeed in adversity, we must seek to become even more proactive in our marketing initiatives, product development programmes and ‘seat capacity’ strategies and initiatives. The more we invest in these areas, the quicker things will turn around and the better placed we will be to achieve more rewarding longer term goals and objectives.”

“Although the Government, has a major part to play in counteracting the new realities being faced by the tourism sector, its initiatives must be supported by all operating stakeholders who must seek as many ways as Page 4 Press Release BOV MHRA Hotel Survey by Deloitte possible to increase their own direct marketing initiatives and improve their own product offering by means of improved service standards, superior product quality and sustainable value for money pricing.”

The BOV MHRA Hotel Survey by Deloitte is an industry initiative sponsored by Bank of Valletta p.l.c. and is open to all hotels in Malta and Gozo, not just MHRA members. It is compiled independently by Deloitte and is the only survey to analyse trends in detail all the way from income to operating profit. Fifty-one properties participated in this edition. This survey edition covers 9,657 rooms (2007 Q4: 8,737) and Euro 48 million in revenue (2007 Q4: Euro 44 million). The next survey will cover Q1 of 2009. Hotels which wish to receive a full copy of the survey report and are prepared to start participating in future hotel surveys are invited to send an email to mhrasurvey@deloitte.com.mt.

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