Three-star hotels’ income squeezed by recession, competition – De Marco

While addressing a seminar organised by the Malta Hotels and Restaurants Association (MHRA) on three-star hotels, Demarco explained that when compared to the rest of Europe, the situation was completely different, with 29 per cent going to three-star hotels and 15.8 per cent going to five-star hotels.

Demarco said that the situation had not always been the same – in 2006, 65 per cent of tourists had went to three-star hotels as against 28 per cent who went to five-star hotel.

He explained that that the reason for this decline had been attributed to a number of factors.  Firstly, in view of the economic crisis, five star hotels had been undercutting their prices to attract tourists, offering prices that were as attractive as those offered by three-star hotels.

Another reason for the crisis in the three-star sector was that most three-star properties had not invested in their infrastructure over the past few years.

Moreover, the percentage of tourists who travelled through a tour operator declined significantly over the past few years, thus affecting the main market for three-star hotels.

For instance, while in 2005 75 per cent of all tourists coming to Malta came through a tour operator, in 2009 only 45 per cent of tourists came through a tour operators,

Traditional markets such as the UK and surprisingly Germany were still strong in tour operator business, however in emerging countries like Italy and Spain, tour operators did not feature at all.

Demarco appealed to all three-star owners to invest more in their properties, and to adopt to new marketing tools.  “It is not enough to have your own website”, De Marco insisted.

On his part, MTA chairman Josef Formosa Gauci revealed that in the first four months of 2010, Malta registered a 7 per cent increase in tourist booking when compared to 2009.

However there was no growth in April in view of the Icelandic volcano ash, which stopped flies across Europe for a whole week.

When compared with other competitors, Spain registered a decline of 4.3 per cent during first four months of 2010, while Cyprus registered a decline of 8.2 per cent when compared with the same period.

A survey on hotel satisfaction conducted by the MHRA showed that while 60 per cent of tourists who went to a five-star hotel were very satisfied with the hotel service, only 27 per cent of four-star-hotels and 16 per cent of three-star hotels registered a similar satisfaction rate, Formosa-Gauci revealed.

Formosa-Gauci appealed to all three-star hotel owners not only to have their own website but to market it through search engines that are available to tourists, such as Opodo and Expedia.