The president of the Malta Hotels and Restaurants Association, Tony Zahra said that the increase in seat capacity for the summer months bodes well for another record year in tourism. He said that after a difficult start of the year tourist arrivals will pick up and thus urged hotel owners to be patient and not to give in to pressures to lower accommodation rates.

Mr Zahra was speaking during the MHRA quarterly presentation from which it transpired that between October and December of last year, tourist arrivals increased by 4.5 percent over the same quarter of 2011. According to the report commissioned by Deloitte, over the same period guest nights increased by 10.7 percent while tourist spending rose by 13.3 percent. Occupancy levels increased by 3.7 percent in 5-star hotels, and by 1.8 percent in 4-star hotels. On the other hand there was a 2.5 percent decrease in the 3-star hotel category.

The event also marked the soft launch of Air Malta's new website designed by Icon Limited. Air Malta Chief Commercial Officer Philip Saunders announced that the national airline registered a 10 percent increase in passengers during the winter months compared to 2012. He said that March is looking very strong irrespective of the election flights. He remarked that late bookings are becoming ever more common.

In his speech the MHRA president remarked that in 2012 the overall performance gained momentum after a slow start during the first quarter. As a matter of fact last year there was an overall 2.1 percent increase in arrivals and 7.8 percent increase in guest nights. Spending reached €1.345 billion, which represents a 9 percent increase.

Mr Zahra said that surveyed hotels did not report a 3.8 percent increase in collective accommodation, contrary to what was reported by the National Statistics Office. He said that 'private accommodation' secured the lion's share of the increase (67%) and a 16.2 percent increase over 2011. The MHRA president attributed this increase to 'unlicensed accommodation' which he said is leading to unfair competition and to a great deal of loss in government revenue.

Mr Zahra warned that between 2006 and 2011, the accommodation industry registered cumulative losses in the region of €10 million. He reiterated that increasing arrivals during shoulder months, reducing utility tariffs by 4 cents per kilowatt and reducing VAT from 7 to 5 percent is the solution to make the industry sustainable.

On the issue of the cost of energy, which has been central in the first weeks of the election campaign, Mr Zahra took a very cautious approach and limited himself by just welcoming  the fact that both political parties have recognised the importance to address this challenge.

Mr Zahra pointed out that even though its call  to lower VAT on tourism, was unheeded by both parties, MHRA will still pursue with its arguments in favour of this reduction claiming that this will generate a strong and positive multiplier effect on the economy.

In his concluding remarks Mr Zahra recommended a two pronged solution to ensure better government policies for tourism. He said that an effective and efficient cabinet leading a lean government structure predisposed to work closely  with the private sector is a must.

WThe second recommendation is to ensure that competent people at the helm of government entities. He added that fiscal, managerial and programme accountability are paramount for proper corporate governance.

Mr Zahra took the opportunity to congratulate government for the €1.128 billion package from the EU for the next seven year period.

MHRA CEO Andrew Agius Muscat gave a brief overview on the current bookings scenario remarking that after a difficult two months in February and March, bookings will pick up in April.