A decrease in tourist arrivals, especially from Germany, France and the UK, coupled with lower flight capacity from these same markets were the reasons behind one of the worst performances of the tourism industry in the last six years, a survey among hoteliers has found.

The drop in the number of tourists from Malta’s major markets no doubt had a negative effect on the industry, Malta Hotels and Restaurants Association president Josef Formosa Gauci said.

The survey, sponsored by Bank of Valletta, was carried out by Deloitte on behalf of the MHRA and covered the months of July to September. Results show that tourist arrivals in this period went down by 6.6 per cent as opposed to the 1.5 per cent rise during the same period last year, while occupancy rates fell by six per cent to 85 per cent of the total occupancy.

Mr Formosa Gauci said these results have been partially mitigated by longer average stays and improved room rates.

The worst hit during the quarter under review was the three-star hotels category. Their occupancy rates dived by 7.7 per cent to 80 per cent, the revenue per available room dropped by 9.4 per cent while the Average Achieved Room Rate (AARR) i.e. accommodation income divided by the number of room-nights sold, rose by 2.4 per cent. Overheads rose by 7.7 per cent while energy costs rose by 36.7 per cent.

The difficulties faced by the sector were reflected in the decrease of 2.9 per cent of staff per room ratio. Due to these results Gross Operating Profit (GOP) decreased by 19.8 per cent, resulting in a drop in profitability of 0.2 per cent.

Mr Formosa Gauci said the results would have been far more disastrous for the sector were it not for the great intake of foreign language students, who are not the ideal people to occupy hotels during the core months.

The five-star category suffered a 7.7 decrease in occupancy for an 81 per cent occupancy rate. Revenue per available room decreased by 1.8 per cent, overhead costs rose by 4.1 per cent while AARR rose by 4.9 per cent. Five-star hotels had an 11.4 per cent increase in energy costs, while payroll per occupied room decreased by 2.1 per cent and staff per room decreased by two per cent. GOP decreased by 4.6 per cent while profitability rose by 6.9 per cent.

The four-star category’s 2.8 per cent decrease in occupancy brought the occupancy level down to 80 per cent. Revenue per room increased by 3.4 per cent while AARR rose by 9.5 per cent. In addition overheads rose by 4.1 per cent, energy costs increased by 5.8 per cent, while staff per room ratio increased by 3.4 per cent, with an increase of one per cent in the payroll cost per occupied room. Four-star hotels’ profitability rose by one per cent, while GOP rose by 5.6 per cent.

The survey showed that Malta suffered a huge blow in tourist arrivals from its traditionally strong markets. During the third quarter, there was a drop of 20.2 per cent from the UK market, a 15.7 per cent drop in the number of tourists from Germany and there were 19.4 per cent less French tourists. However there was a rise of 21.3 per cent in Italian tourists and a 17.6 rise in tourists from Scandinavia.

“Malta and Gozo just cannot continue to register such losses from its core markets and all stakeholders should endeavour to work more closely together in addressing the challenges being faced,” Mr Formosa Gauci said.

The rise in Italian tourists, said Mr Formosa Gauci, is attributed to the Low Cost Carrier (LCC) service which has been operating between Italy and Malta. He said that LCC can provide the much needed carrier occupancy. However a member of the floor said that LCC is not enough as Cyprus, one of Malta’s competitors, enjoyed a seven per cent increase in occupancy and an 8.5 per cent decrease in AARR and it still does not have a LCC service.

Cyprus, together with Malta’s other competitors showed a marked improvement. Costa del Sol showed a 0.9 increase in occupancy and a 9.8 increase in AARR, Mallorca showed a rise of five and 5.1 per cent respectively in occupancy and AARR while the Canary Islands had a one per cent decrease in occupancy. Its AARR however increased by six per cent.

Mr Formosa Gauci said the Malta Tourism Authority (MTA), now that it has finished its restructuring process, must pull up its socks and concentrate on its main role, that of marketing Malta abroad. He said that some good results are expected from the UK market as the MTA is teaming up with experts in order to better penetrate the market and understand clients’ needs.

He said he is also confident that the Tourism Ministry Consultative Group will do its utmost to improve the industry’s situation.

During December, projections show five-star and four-star occupation will rise by 18 per cent and eight per cent respectively while three-star hotel occupancy will decrease by 19.8 per cent. The only sector that is expected to make an improvement during January is the five-star sector with a 13 per cent improvement. The four-star occupancy rate in January is expected to decrease by 10 per cent while three-star occupancy rate is expected to plunge further by 21 per cent. Mr Formosa Gauci said he is confident that as happened in previous years, late bookings will contribute to ease the rather gloomy looking projections.