MHRA survey for Q2 2010 shows hotel arrivals up, profits down

Guest nights for the second quarter of 2010 increased as well when compared to the same quarter last year.

The MHRA survey also showed that in the second quarter of 2010, tourist spend increased by 10.6% when compared to the same quarter last year.

When compared to the 2008 record year in tourism, the MHRA survey showed that there had been a slight decrease of 0.3% in tourist arrivals, and a decrease of 3.3% in guest nights.

It was only tourist spend that had increased by 3% during the second quarter of 2010 when compared to the same quarter two years ago.

The survey results show that in quarter 2 occupancy levels improved across all 3 hotel categories with the best improvements being registered by 3- and 5-star categories, which had been worst hit by last year’s downturn.

Notwithstanding the significant progress registered, it was only the 5-star hotel category which managed to exceed 2008 occupancy levels, the MHRA survey showed.

The year-to-date occupancy trends followed the same patterns as those reported for quarter 2, “with the noticeable difference that even the 5-star category lagged behind the occupancy levels registered in 2008.

Albeit at a slower pace than occupancy levels, Average Achieved Room Rates also improved in each of the 3 hotel categories for both the quarter and on a year-to-date basis.

Nonetheless, “the rate improvements where not sufficient to make good for the decline in rate experienced last year and except for the 3-star category, remained below 2008 levels,2 the MHRA survey warned.

Without playing down the significance of the progress registered to-date, MHRA President George Micallef stressed that the revenue improvement was “still not sufficient to make good for the loss of revenue experienced in 2009 and the sharp increase in operating costs in 2010, which are eroding the competiveness of Malta as a value for money destination.

“Up to June 2010, notwithstanding the improved revenue trends, hotel gross operating profits remained 25% below the average levels of 2006-8 and up to 45% lower than the best year results, Micallef warned.

“Declining profits make it increasingly difficult for hoteliers to find disposable capital needed for re-investment, and Government’s delay in launching the energy-saving scheme and 3% interest subsidy on refurbishment programmes, which had been agreed with MHRA last March, is not helping the situation,” he lamented.

“If we want to ensure that our hotel industry remains on a solid footing we must, continue to push for further increases in tourist arrivals and must finds realistic ways of containing costs,” Micallef insisted,

“This is a time for crucial difficult decisions to be taken and I augur that a cautious but sensible approach will prevail,” the MHRA President concluded his presentation.