Once the tunnel between Malta and Gozo is built, Gozo will no longer have the same attraction to tourists as it will become an extension of Malta, Tony Zahra, the president of the Malta Hotels and Restaurants Association, told The Malta Independent in a wide-ranging interview.

Zahra also said that anybody who has not yet started on new projects, like the DB project involving five or even six-star hotels, should question whether they are building over-capacity. He believes that about double the amount of tourists would be necessary to fill these new beds.

Once there is over-capacity Zahra thinks there will be a bloodbath. Everyone would have to cut their prices and only the strongest will survive.

Asked if the number of gentlemen’s clubs in Paceville affects the tourism industry, Zahra said there is nothing wrong with one or two, but the sheer number of them particularly affects the MICE (Meeting, Incentives, Conferences, Events) traffic. This type of tourism is very important for five-star hotels in winter.

Zahra also said that the recent claims that Malta’s reputation was damaged abroad because of the rule of law issues and the assassination of Daphne Caruana Galizia have not affected the tourism industry.

He believes that the whole island is over-populated and that due to the foreigners working here and the tourists, at their peak, Malta’s population has doubled. He said, however, that tourists are not the problem but the carrying capacity of the island in general.

Tourist arrivals are reported to have increased by 2.8 percent and guest nights by 4.2 percent. Whilst remaining positive, the increases are less pronounced than those registered in previous years. Why do you think this is?

Over the years we have had dramatic increases in tourists, so although a 4 percent increase over last year is not 10 percent of the previous year it is certainly more than 10 percent over 2014. You cannot keep increasing at the same percentages we were increasing before.

The island is 331km2 so there is a finite number of people it can take. We need to do a carrying capacity exercise. Taking an example, Hagar Qim used to take an unlimited number of people visiting the site. Now they found out only 10 persons per hour can enter the site, to ensure no damage is done. We should be going for sustainability. This is quality in everything that we do, which does not mean five-stars necessarily. Quality means that what you, you do it well. If you are a three star, you are the best three star. It is not about being high-class but quality.

In Malta we have a problem. We know the price of everything but the value of nothing. Quality is also being proud of what you are doing.

Do you think construction has had an effect on tourism and the quality of tourism?

This morning I was in Balluta and I could see 11 cranes, apart from the trenches being dug and the beach being replenished. There are also plots being demolished everywhere. We are no longer talking about construction, but destruction. How can we sustain this? How can we ask people to come here with all this destruction? People come here to relax and instead you cannot go anywhere because there are too much traffic and pressure.

Have we become too modernised for the type of tourism we attract?

No, not at all. We do not have a city life. What we have wherever you go is construction, and it does not seem to stop. If you have a construction site in Mellieha, the people there are going to be affected but even the people going there. The size of the island is small, so no matter where the construction is, it is going to be felt. You have to question, how many sites can we have at any one go? This is the same for everything, even restaurants. This is what sustainability is all about.

Regarding the new projects, including the DB project and Corinthia projects, involving five or even six-star hotels, would you same you have the same stance? Are there too many?

If the number of beds that are being mentioned as being in the pipeline are materialised then we need more tourists to have these beds filled. Instead of having 2.5 million we would need more or less 4 million to fill up all the beds. Is this sustainable? Anybody that today has not yet started on those projects, I would recommend that he has a very good look and asks: am I building over-capacity? Once there is over-capacity there is going to be a blood bath. Everyone is going to cut his prices and only the strongest are going to survive.

Has Malta’s reputation regarding the recent mentions of the rule of law and the assassination of journalist Daphne Caruana Galizia affected tourism in Malta?

I do not think that has had an effect on tourism. What has had an effect on tourism is that for a number of years you have had places like Turkey, Tunisia, and Egypt, which because of their domestic problems people were afraid to go there. These are countries that attract large numbers of people. These people went to what was perceived to be safe destinations, like Spain and Malta, instead. Now that they are opening up, and also because of their rate of exchange, the prices are very low so they are attracting people who used to go there. These were not really our tourists but theirs.

It is known that unlicensed private accommodation is having an effect on tourists staying in hotels. Do you know if anything is being down to clamp down on these unlicensed accommodations?

At the last quarterly meeting the Minister did say that booking.com, one of the platforms, is making sure that anything they put on their site has a license number. Anyone not licensed cannot be on their site, but that is one site only. There are many other sites where they do not insist on it.

We have said for a long time that if the government really wanted to clamp down on unlicensed accommodation they can easily do it. You can see who is advertising on the sites and is not licensed.

We have seen for the first time a decline in occupancy in hotel accommodation, despite an increase in the number of tourists. We do not mind people competing but what we do mind is having unfair competition. If you are not registered you are not paying your VAT, MTA license fees, 15 percent rental tax, Eco Tax. Very quickly it is 40 percent you are saving, so you can afford to undercut and still make more money. Even health and safety is not applied in such unlicensed accommodation. What happens if there is a fire and people get killed? That could destroy our tourism industry.

Since 2016, those offering tourist accommodation have been obliged to collect €0.50c per person for each night, capped at €5, known as Eco Tax. Is this being enforced?

The government is not actually enforcing it. The agreement is that it goes into a fund which is used for embellishments in the tourism industry. The first embellishment we are doing is Paceville. We have commissioned an embellishment plan and it was completed last year. Now, once the summer is over, we will start with the first embellishment. The first part will be where there is the playground today which will become an open area, which will give us some breathing space.

Considering the amount of gentlemen’s club in Paceville, do you think tourists have a proper entertainment area?

One of the difficulties with the gentlemen’s clubs is the fact that there are so many. There is nothing wrong with one or two, but when you are going to have a number it hurts what we call the MICE (Meeting, Incentives, Conferences, Events) traffic. This is very important for our five-star hotels in the winter. When they come on the inception visits and see so many of these clubs, they are not too keen because they are bringing delegates over from abroad.

There is nothing wrong with having an entertainment area but we seem to be excelling at having many of the same thing. If you go into Valletta, there are too many restaurants, all selling the same thing. We have to think in terms of being innovative, fewer people and more quality.

Gozo is still pretty laid back and a special attraction for tourists. Do you think the Gozo tunnel will have an effect on tourism?

In terms of tourists using the tunnel, I think there will be very few. If you are a tourist what is nicer than going on a ferry and looking at the beautiful sea. Gozo will become an extension of Malta, and what is the attraction then?

Do you think the new airline, MaltaAir, will affect the tourism industry?

Malta Air is essentially Ryanair under a different name. There is no doubting that Ryanair has been instrumental in driving lots of tourist to Malta from areas which were not traditionally places tourists would come from. Malta Air will have a few more connections so they will diversify the market and I think diversification of the market is very important. But the carrying capacity is still an issue we need to focus on, although I do not believe Malta Air should cause a problem. They have five planes here already and they are registering the planes, not actually operating them out of Malta. 

Do you think Malta has reached saturation in the number of people? And should tourists be limited?

We still need to do this carrying capacity exercise, and I personally think the whole island is over-populated. You have 450,000 Maltese, maybe another 150,000 foreigners working here, and maybe at the peak 200,000 tourists, which results in 800,000 people at any one go. That is doubling the size of what we had before. Would bringing in more improve our quality of life, is it going to make us better off, happier, or is just going to add more traffic and more stress?

Tourists are not the problem but the carrying capacity of the island in general. If we had to have one-third of the construction at the moment, two-thirds of the people working on construction, and two-thirds of the traffic related to construction would not be here. There is no magic bullet to do something and fix everything. We need to do a lot of smalls things to fix everything. Regarding tourism, we need to increased the spending of the tourists coming to Malta. This is done by being best at whatever you do.