Wage relief for employees not enough, hoteliers tells Abela: ‘Industry is at a crossroads’

Malta’s hoteliers and catering establishments have warned Prime Minister Robert Abela they are at a crossroads as the airport has been closed, with all restaurants shut, events cancelled and hotels deserted with zero occupancy. 

“There is zero income and only massive expenditure, a situation that cannot be sustained for more than a few weeks. This is a reality even for the most frugal of companies, let alone those that in the last years have re-invested tremendous sums of money in upgrading their product,” MHRA president Tony Zahra said. 

Zahra was speaking after what he termed a “surprising and disappointing” package of measures from the state announced by Abela on Wednesday evening, which he said was not enough for most stakeholders to retain full-time employees and remain open. 

As the coronavirus crisis hits Malta hard, it is its booming tourist industry that has taken a massive hit, with its record 2-million-a year tourist arrivals now coming to a screeching halt. 

The labour-intensive sector has a huge payroll, but its industry leaders say they have contributed €2.2 billion to the Maltese coffers every year. 

“The COVID-19 global outbreak and the consequential economic disaster was unpredictable and therefore no contingency plans could possibly be envisioned. It is truly the unknown-unknown hitting the whole world economy with a might like that of a nuclear device,” Zahra said. 

Operators in the tourism sector are now faced with having to carry payroll costs every single day without any income being generated for an indefinite period of time. “Clearly this can only be sustained for a small number of weeks but this period can be extended substantially with better government assistance and some help from employees. Without both of these the ability to stay operational is very limited,” Zahra said. 

The hotelier said he did not expect any recovery for the tourism industry in the next weeks. “It can take months before some form of business returns. A contribution of €320 per employee per month towards the payroll costs is a far cry from what was expected to help. Some operators will find themselves in a dire economic state.” 

He said that unsecured loans aiming to complement the announced grants were welcome, giving operators some breathing space in the hope that this economic crisis will recede in the next four months. 

“MHRA is indeed disappointed that the measures announced fell short from addressing the business needs at present and cannot view the outlook as positive. Without support of payroll costs, by a minimum of €800 per month per employee, the situation will effectively turn very difficult, very quickly.”