Hoteliers say budget ‘well thought-out’ but little for hotels

MHRA president Tony Zahra - Malta running the risk of its accommodation and catering sector slowly deteriorating.

MHRA president Tony Zahra
MHRA president Tony Zahra

The Malta Hotels and Restaurants Association said Budget 2013 was a positive one on a national perspective for the next 12 months, but noted nothing positive from a hotel investor's perspective, especially spanning a period of time.

But MHRA president Tony Zahra said that it was with regret that Malta was running the risk of its accommodation and catering sector slowly deteriorating.

"The consequences now will be hard on the hotels and restaurants,   but much harder on government since a drop of income from the hotels and restaurants will result in a substantial drop of income to government.

"We are risking that the hotel sector produces much less revenue and pays much less in VAT and other contributions to government. This is a lose-lose situation, something which should and could be avoided."       

Zahra said that MHRA were pleased to see an increase in the budget for MTA of €1 million euros, specifically aimed at increasing arrivals in the shoulder and low period. 

"MHRA is also pleased to note a number of measures which are all in the right direction including; investment in product, in particular in relation to heritage sites; tax credit incentives and the development of Boutique hotels in Valletta, Mdina and the three cities. MHRA is also encouraged that Government recognises the need to assist the 3 and 4 stars Hotels but more details are required to understand how this will be achieved," Zahra said.

But Zahra said the MHRA was less enthusiastic that the finance minister had not heeded a call by the MHRA to leave something in hoteliers' tills.

"The 1.6% GDP growth for 2013 is also projected to come mainly from the tourism industry. The backbone of the industry is the hotels and restaurants which need regular investment to keep them up to date if not improved. 

"We have been asking government for a return to the 5% VAT rate on accommodation and a drop in electricity rates by 4c a kilowatt. These two measures would have been important for the hoteliers to be able to fund the much needed refurbishment and re-investment which needs to be done regularly."

More in Budget 2013