[WATCH] Turkey, Egypt and Airbnb are new challenge for Maltese tourism, MHRA boss says

Although Malta has been enjoying a steady increase in tourist arrivals, with 2018 registering as a record year, the island faces new challenges from competing countries like Turkey which are now capable of attracting more visitors, hotelier Tony Zahra said.

The Malta Hotels and Restaurants Association president pointed out that another challenge in the sector is that hotels in Malta were also facing competition from private accommodation services and relatively new arrivals like Airbnb.

Zahra was speaking on Friday at a seminar on Malta’s touristic vision, where the MHRA’s BOV Deloitte Hotels Performance Survey results for the last three months of 2018, and for last year as a whole, were announced.

The survey figures indicate that 2018 set a new high for tourism in Malta, with strong growth registered in the first nine months of the year, continuing into its final quarter.

During the final three months of 2018, the number of tourist arrivals and guest nights increased by 9.8% and 8.5% respectively, compared to the same period the year previous.

Deloitte survey results show that tourism continued to spike upward in recent years

National Statistics Office figures show that over 555,000 tourists arrived in Malta between October and December 2018, accounting for 22% of all tourist arrivals last year.
 
Of these, 64% stayed in collective accommodation, denoting a decrease in guest nights spent in hotels of 1.7%. Guests nights overall, however, increased in the last quarter of 2018, with the merit for this going to the private accommodation sector.

On an annual basis, tourist arrivals in 2018 increased by 14.3%, with 2.6 million tourists having arrived at Malta’s shores by the end of the year.

Competition from Turkey and Egypt

While the number of guests nights in collective accommodation increased by 7.1% for the whole of 2018, NSO figures show that private accommodation guests nights increased at the faster pace of 19.7%.

A number of reasons are behind this, Zahra said. “A certain portion of people might be staying in non-collective accommodation, but this isn’t the only factor, and a various other things are happening in the marketplace.”

He said Malta was facing competition from destinations such as Turkey and Egypt, which in the past years might not have been considered safe due to terrorist attacks, but which are now coming into the market “at a level which is extremely competitive”.

“We are looking at this new competitive scenario, and we have to react at the correct time, which is why the MHRA has met with a number of players in the market and has put forth an action plan based on short and long-term goals,” Zahra underscored.

The hotelier said that, in the short term, those in the industry need to bring more attention to Malta and to selling the island successfully.

Deloitte Survey: Tourist expenditure exceeded €2 million in 2018

“We used to have many people at Air Malta who were very good at selling the island… but one by one we’ve lost them…” he lamented.

“We also used to have more boots on the ground in the past, pushing for Malta. These have all either disappeared or reduced their activity. We won’t overcome the challenge by sitting back and complaining… we have to engage in a collective effort, which must also come from the stakeholders.”

The elephant in the room

Calling non-collective accommodation such as Airbnb “the elephant in the room”, Zahra said this was a problem which wasn’t unique to Malta, as many cities abroad were facing the same phenomenon.

“We must attack this collectively,” he said, “There isn’t one simple answer to all this, and we have to adopt a series of initiatives. In the end the consumer is looking for value for money, so we should offer this.”

“Generally, we’re doing a pretty good job, but we must continue working hard, and, this year, we need to work harder to remain successful.”

The MHRA and the Tourism Minister have produced a plan, the first of its kind, to embellish the Paceville area, Zahra added. Similar "upgrades" are expected to be implemented in another eight localities in the next four years.

Tourism strategy 2019-2025

Addressing the conference, Tourism Minister Konrad Mizzi acknowledged that the industry and associated trends were changing.

“Boutique hotels are now a reality, and the surveys shows that these are occupying a similar space to the four and five start hotels. Some tourists are choosing such types of accommodation instead of others,” Mizzi said.

“Airbnb is also a big trend, globally and in Malta. A lot of Maltese property owners are investing in this type of accommodation. This is a reality we must take cognisance of. We have to ensure they are adequately taxed, compliant and pay their landlords’ insurance.”

Mizzi said that in the coming six months the government would be working with the Malta Tourism Authority, the MHRA and other stakeholders with a view towards developing a strategy for Maltese tourism up to 2025.
 
“This will help continue to position Malta as [an attractive] destination. We will agree on which niches and target markets we should focus on, and what training our human resources will need. This will be done in full sync with the industry, and in this way we can ensure the sector will be a success for the coming decade,” the minister said.

Turning to accommodation, he said that over the last few years many hotel operators were reducing the percentage of their dependency tour operators.

“Tour operators have been complaining they would like to 'sell' Malta, but don’t have the accommodation capacity to do so.”

Based on discussions held in recent weeks on the matter, he said, however, the response from hotels has been positive, and tour operators now believe they can bring in the numbers.

“We need to start focusing on expenditure, as Mr Zahra has been saying. The reality is the economy is doing well because many small investors are flourishing, but at the same time we have to up our game in terms of quality tourism,” Mizzi added.