The news that April, May and June were once again record months for tourist arrivals is positive news, but while occupancy is on the increase, utility bills do seem to be affecting hotel revenues, according to the Malta Hotels and Restaurants Association.

While welcoming these positive trends, MHRA President Tony Zahra remarked that the profitability in this sector is still below the levels of 2008 which was a record year, blaming the increase in utility bills as one of the main factors. The outlook is positive, but the costs being incurred by many establishments is making profitability marginal.

Results from the MHRA quarterly survey indicate an increase of 3.6% in the occupancy level of five-star hotels over the same quarter of 2011, but a decrease of 2.7% in four-star hotels. Three-star hotels registered a 1.5% increase.

But, when one takes the first six months of the year into account, there was a decrease across the board in all categories over the same period of 2011. From January to June, five-star hotels registered a 1% decrease in occupancy rates when compared with 2011, while those in the four-star category were the worst hit with a 3.2% decrease. Occupancy rates in the three-star category dropped by 1.6% in the first half of the year. The sharp increase in the third quarter is expected to compensate for this drop.

It is all relative, and to go back to positives, the overall situation is significantly better than in 2010 when people cut back on holidays abroad, due to the financial crash.

But it brings us back to the same problem we discuss every year. Malta is flooded with visitors over the summer months and a couple of shoulder months either side. The problem has always been attracting people in the bleaker months – November, December, January and February.

The MHRA also believes that the shoulder months are key. In his speech, Mr Tabone said that sustainability must be achieved by increasing arrivals in the shoulder and winter period to give increased revenues without increased costs.

The association also put forward its own ideas – for example, to lower the energy tariffs by four cents per kilowatt. Another suggestion is to revert the VAT rate on accommodation back to 5% from the present rate of 7%. He said that unless action is taken, establishments will not have sufficient funds to reinvest in upgrading and refurbishment projects.

But on the flipside, we contend that while hoteliers are right in what they are saying, there needs to be more of an element of competitiveness and re-investment in Green and energy-saving technology.

Some establishments – particularly those that have been built or completely refitted in the last five years or so – have invested heavily in such technology, but the truth is that hotels in Malta lag far behind in such initiatives.

The problem is double-pronged. At a room level, compared to hotels abroad, there is no emphasis on energy-saving technology and the same happens behind the scenes. Just like Maltese households have had to adapt, hotels have to as well. We understand that the costs of doing so are high, but it is the only way.

Let us hope that the summer months will give another boost to this sector, which is crucial for Malta’s continued growth in the European economy.