Mr Zahra said the decision was even more dangerous since it had been taken just before the summer season, on which Malta depended most for its tourism.
“We have long been calling for a full audit of the MTA because the authority could do much more work. It is evident that the dynamics of tourism have not yet been understood completely by the authorities. We are willing to help the new MTA chairman but we need to be given the space. This was a very dangerous decision,” he said.
Mr Zahra continued that the tourism industry is Malta’s bread and butter and “if we really believe in it, then we have to invest in it.” He said Malta needed a newly-designed marketing strategy,
The association, he said, was not only calling for the decision to be reversed but for the MTA to be given three months to get its house in order and restructure. If it does not achieve results, then the government would be right to cut its budget but at least they should be given the opportunity to restructure.
Reacting to the MHRA’s survey on tourism trends in the first three months this year, Mr Zahra said the survey proved the association right when it forecast that the first quarter of 2004 would be weak.
“We predicted that it would be a weak winter season and the survey results prove this, although we are pleased to see that it not a disastrous situation. In this quarter, other countries improved their performance by 10 per cent. What is worrying is that while other European countries are improving, we are not. We cannot blame any longer the international situation because it does not make sense that this is affecting us and not other countries,” Mr Zahra said.
He said the formula being used by other countries was the same one the MHRA has long been calling for. “Despite several calls for the authorities to get our product in order and then market it properly, we have seen very little being done in this regard. We need to do much more, much, much faster,” he said.
Commenting on the indications for the second quarter, Mr Zahra said these look good. “We anticipate a better growth in volume in the second quarter of between two and four per cent,” he said.
Mr Zahra also remarked about the lack of a green light for the use of the EU’s structural funds. “Structural funds have not yet been released. We don’t have a green light to tell our members to submit their project ideas. Several months have been wasted because of excess bureaucracy. Get this issue resolved or else we will miss the boat,” he said. On the smoking regulations being imposed by the government, the MHRA president described the issue as a “hot potato”, adding that unless the government took a stand on the issue, the association was not prepared to issue any directions for its members.
“It is obvious that Europe is heading towards a total ban on smoking within five years. The Health Minister (Louis Deguara) is reluctant to go on record about this. The MHRA,for its part, is reluctant to tell people to spend money on air purifiers. Our final position will be taken after a responsible approach on the matter is taken. Perhaps the impression that such a decision could endanger business may not be correct,” he said.
The survey results
The survey commissioned by the MHRA, carried out by Deloitte, showed that over the period January to March 2004, five-star hotel occupancy was five per cent lower than last year. In the first quarter (Q1) 2003, this stood at 48 per cent while in the same quarter in 2002, this figure stood at 53 per cent. The occupancy in four-star hotels stood at 54 per cent, unchanged from the figure for the first quarter last year. Occupancy in three-star hotels fell by two per cent, from 57 per cent in Q1 2003 to 55 per cent this year.
The survey also revealed that during Q1 this year, room rates in five-star hotels increased to Lm27.03 from Lm24.52 in the same quarter in 2003. The room rate in four-star hotels fell from Lm8.66 in the first quarter of 2003 to Lm7.83 in Q1 this year and that for three-star hotels increased from Lm5.29 in Q1 2003 to Lm5.60.
The survey showed that a five-star hotel had an operating loss of Lm323 per room in the first quarter this year compared to the Lm485 in Q1 2003 and Lm88 in Q1 2002. A four-star hotel had an operating loss of Lm199 per room in the period under review when in Q1 2003 and Q1 2002 this stood at Lm192 and Lm251 per room respectively. A three-star hotel had an operating loss of Lm69 per room while in the same period last year this stood at Lm92 and Lm97 in 2002.
Tourism volumes during the first three months this year stood at 3.2 per cent less than last year. Hotel occupancy rates fell in the five-star sector as a result of an increase in supply, with new hotels coming onto the market. Occupancy in four-star hotels remained at more or less the same level while that in three-star hotels fell by two per cent.
The survey also revealed that conference and incentive tourism was considerably lower in Q1 this year when compared to Q1 last year. A total of 61 hotels participated in this survey with a total of 10,919 rooms and a total revenue of Lm12.7 million.