[WATCH] Lowcostholidays collapse to cost Malta hotels €2 million – MHRA president

MHRA president Tony Zahra on impact of low cost holidays collapse on Maltese hotels

The collapse of the Low Cost Travel Group (LCTG) earlier this month will cost collaborating Maltese hotels around €2 million, the president of the Malta Hotels and Restaurants Association (MHRA) confirmed.

Tony Zahra said that the collapse of the bed-bank and travel group resulted in many Maltese hotels finding themselves having to resell thousands of beds and rooms that had been previously booked by LCTG.

The company folded on 15 July saying that it had ended its activities following “exhaustive attempts by the group’s directors to rescue the group, which has been hampered by the recent and ongoing turbulent financial environment”.

Sources in the industry told MaltaToday that the biggest problem was not getting the beds and rooms filled in the peak season, as the bookings would probably still come in from other avenues.

The major concern for Maltese hotels would be selling the beds and rooms during the slow seasons, especially winter, since many of the hotels affected used to depend on LCTG pre-buying the beds in bulk, albeit at reduced rates, to sell on to its clients later.

“But an even bigger problem for hotels is dealing with those tourists who had already arrived in Malta and for which, the hotels had yet to receive payment from LCTG,” said Zahra.

The MHRA held a closed-door meeting last week for hoteliers that had been impacted the collapse of LCTG to discuss a possible course of action.

“One thing that is obvious is that we need to implement adequate vetting systems for similar companies like Lowcostholidays that purchase beds and rooms to sell on to clients,” he said.

Zahra also introduced members of the board of governors of the Mediterranean Tourism Foundation (MTF) that were meeting in Malta to promote a manifesto of 30 proposed actions that the foundation pledges to promote through its initiatives.

MTF is a voluntary, non-governmental organisation initiative led by Malta and was established by the MHRA in 2013, with its statute being formally adopted in December 2015.

It aims to encourage the implementation of actions that promote the sustainable growth of tourism across the Mediterranean region, by developing tools and opportunities that support the various stakeholders in achieving this objective.

MTF is comprised of individual and corporate members from all over the world who share an interest in matters relating to Mediterranean tourism. 

Zahra, who is also president of the foundation, said that the 30 pledges in the manifesto revolve around the organisation of conferences across the Mediterranean countries, the setting up of the Mediterranean Institute of Tourism Studies, and the promotion of tourism events across the region with a view to address the seasonality issue.

On Thursday, the board will be presenting of the manifesto to prime minister Joseph Muscat and tourism minister Edward Zammit Lewis.