Tourism will 'need to rise' by 1m more arrivals than 2023 levels to retain same occupancy levels

Tourism numbers will need to rise by more than one million visitors over the 2023 levels for the same occupancy levels to be retained, a Deloitte survey commissioned by the Malta Hotels and Restaurants showed Friday.With 2023 statistics showing that

By: independent.com.mt

Nov 15 2024
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Tourism will 'need to rise' by

With 2023 statistics showing that nearly three million tourists visited Malta, this means that tourism arrivals will have to top four million for the occupancy levels to be kept up.

The MHRA Q3 2024 Performance Survey also covered the introduction of a skills pass before the employment of workers, an idea that respondents said was good in principle but needs fine-tuning.

Poor planning risks major disruptions, and authorities are "urged to consider current labour shortages when rolling out new requirements", the survey showed.

David Delicata, Deloitte Malta's Transportation, Hospitality, and Services Leader, said that Deloitte was engaged to carry out a study on the tourism carrying capacity two years ago with tourism recovering from the impact of Covid, and commented that the study was intended to understand the sustainability of the tourism market.

He said that when the study was carried out, Deloitte estimated that there would need to be 4.5 million annual tourist arrivals in order to retain 2019 occupancy levels.

Delicata said that there are over 13,000 new rooms planned for development in Malta and Gozo in terms of projected increase in room capacity. He added that the existing pipeline implies an increase of 70% in Malta's collective accommodation capacity.

Delicata stated that in order to retain collective accommodation occupancy at 2023 levels, assuming the full pipeline of properties converts and 15% of existing bed stock is retired, then tourist arrivals will need to increase by a little over one million over 2023.

Delicata said that without the necessary action, there are significant risks of oversupply over the upcoming years with tourist arrivals figures required to reach 4.4 million. He commented that if warnings are left unheeded, then the impact on hospitality and investors could be severe.

Tourist arrivals for Q3 2024 reached 1.2 million, surpassing the figure registered in Q3 2023 by 180,000 arrivals, or 18%. Guest nights also increased by 871,000 nights when compared to Q3 2023. Delicata added that tourist nights in 2023 increased by 4.7% when compared to 2019. He also said that the number of flights registered this quarter stood at 13.3% above the level registered in 2023.

On the matter of tourism expenditure, Delicata stated that tourism expenditure reached €1,270 million in Q3 2024, which is 22% higher than the same period in 2023. This indicates an improved tourism spend linked to the increase in tourist arrivals, with average spend per tourist standing at €1,080, describing it as a marginal increase of 3.6% compared to Q3 2023.

Occupancy levels in 5 and 4-star accommodations saw a slight increase relative to 2023, Deloitte said. In terms of 5-star occupancy, for Q3 2024 there was a 3.8% increase compared to 2023. Regarding 4-star occupancy, there was an increase of 2.1%.

Tourism Minister Clayton Bartolo spoke at the event and described the results of the survey as positive, remarking that there are a number of encouraging figures. He continued that however, "it is clear that challenges remain and it is up to us to offer solutions and see how these challenges can be turned into opportunities."

The minister said that the government is assisting the industry through things such as energy subsidies, which he commented offer stability. He remarked that the government understands that the tourism industry is one of the most important industries for the Maltese economy and needs to be given attention as such.

Bartolo said that the tourism industry has come out of Covid even stronger than it was before.

The Tourism Minister spoke about the importance of connectivity and the government's work to expand it. He said that Malta currently has the best connectivity program in the country's history, and added that discussions are ongoing with various airlines to "continue putting Malta on the map".

The Nationalist Party's spokesperson for tourism, Mario de Marco, said that public sentiment in the country has become adverse towards an increase in tourism arrivals. He said that before 2007, the industry and the general public were in unison, but that the question needs to be asked now about what changed.

De Marco said that it takes a courageous politician and a courageous entrepreneur to talk about implementing an upper limit, but he remarked that the challenges need to be addressed, not ignored. He commented that the time for an alternative is now.