The hotel industry registered a mild recovery in the second quarter of this year, according to a survey carried out by Deloitte for the association.

However, while the number of tourists for this quarter is up by two per cent, tourism expenditure is down by six per cent, and the number of bed-nights sold is also down by two per cent.

“We are holding our ground in terms of occupancy. However, with regard to room rates, we are falling flat on our face,” Mr Zahra said.

Comparative data that the association acquired from Deloitte’s International Hotelbenchmark survey this year shows that Malta’s hotel room rates are generally low when compared to their counterparts in the Balearics, Costa del Sol and Canary islands – considered to be resorts in the same category as Malta.

The results of the Deloitte survey show both positive and negative indicators. To date this year, the five-star sector registered a 15.4 per cent gross operating profit. This is a 3.2 per cent increase over 2003, but is lower than the 16.5 per cent registered in the previous year, 2002, and the 17.7 per cent in 2001.

On the other hand, the four-star sector this year has registered 7.8 per cent profit margin to date, a fall of 1.6 per cent over last year, when a 9.4 per cent profit margin was registered. Nevertheless, this sector had experienced a jolt in 2002 when it registered a 4.2 per cent profit margin – a fall of 9.8 per cent over the previous year. This year’s figure is therefore regarded as a relatively stable profit margin.

In the three-star sector, Deloitte Partner Nick Captur said that statistics for this segment were hard to read because a number of members had refused to take part as their properties were negatively affected by building work and the Paceville embellishment project. “The negative impact that this had on this category, as a consequence, is hard to quantify.”

In general, the gross operating profit per available room for the five-star sector is five per cent higher, a rise that compensates for the marginal fall in revenue. The four-star sector margins declined slightly.

The average achieved room rates (AARR) for five-star hotels increased by 11 per cent in the second quarter and now stands at Lm40 per room. Pricing in this sector stabilised following last year’s increase in supply. In sharp contrast, both four and three-star hotels registered a fall of six and eight per cent respectively, bringing their levels to an all-time low.

During the second quarter of this year, occupancy in the five-star sector stood at 69 per cent, registering a decline over previous years (2003 – 74 per cent, 2002 – 72 per cent). Occupancy in the four-star sector improved slightly to 72 per cent (2003 – 70 per cent, 2002 – 66 per cent).

Mr Zahra said that Malta as a whole had to give serious attention to development of the tourism product, making reference to the shabby condition of some areas in the island, the state of the roads, the abandoned state of some important heritage sites and the bad service some tourists are given.

“We do not seem to appreciate the importance of the sector. We need to polish our product and instil the sense of hospitality for which we were once known.”

He said that with the appropriate effort, our country could stand side-by-side with luxury destinations, especially if we concentrate on the uniqueness of the Maltese cultural heritage. “This is not rocket science but it is the only way in which we can attract quality tourism and higher room rates.”

Mr Zahra urged the government to take the necessary steps to promote the sector. “Sometimes we lobby for the most basic things and still find we have to surmount brick walls.”

In this connection, he said that the government had gone some way and mentioned the report on restructuring currently being prepared for the Malta Tourism Authority. Once this report is ready, said Mr Zahra, the government had to find the political will to implement it.