The hospitality industry experienced significant recovery in 2022 but profits still fell short of 2019 levels, the Malta Hotels and Restaurants Association’s end-of-year and quarterly survey results show.
In a presentation given by Deloitte financial advisory, leader Raphael Aloisio said that, on a cumulative basis, tourist arrivals reached 83% of the numbers seen in 2019, while the average length of stay was marginally higher and the number of cumulative guest nights reached 85.4% of 2019 levels.
Tourists spent an average of €121.86 for every day they spent in Malta, some 9.4% more than that registered in 2019. However, overall tourist spending reached 91% of that reached during the same period in 2019.
Almost 2.3 million tourists arrived in Malta, a marked improvement from the 659,000 in 2020 and 968,000 in 2021 but still short of the 2.7 million registered in 2019.
In total, visitors spent 16,508 guest nights in 2022, some 85.4% of the 19,339 guest nights seen before the pandemic years.
In 2022, occupation in five-star hotels reached 54.3% - 75% of 2019 levels - most likely due to the impact of low occupancy because of COVID-19 restrictions still being in place during the first quarter of the year. Occupancy reached 72.1% in four-star hotels and 65.7% in three-star hotels.
While five-star hotels registered an average daily rate of €191.1, four-star hotels registered a rate of €89.6 and three-star hotels of €65.4.
On average, five-star hotels made a gross operating profit of €21,050.8 per available room, which is just 14% short of the levels reached in 2019.
Conversely, four-star hotels made €12,887.9 in gross operating profit per available room or 79% of 2019 levels.
Aloisio said that while overall results for 2022 indicate a strong recovery, overall profitability remains lower than in 201. This was due to an increased supply of accommodation and an overall increase in costs.
“The writing is on the wall and not everyone is going to win,” Aloisio warned.
“The mentality of some in the industry that if they have the supply then they will automatically succeed, I think, is wrong.
“It’s all about the offering and clients are becoming more choosy about where they stay. The numbers are telling us that despite an overall positive trend and a great number of you doing well, there are also others that are doing terribly, and these people need to align their strategies because if they don’t it's going to hurt them,” he said.
MHRA president Tony Zahra said that while the industry is on the road to recovery, it is important to keep in mind the challenges ahead and maintain momentum to get back to 2019 levels sooner.
Zahra said the government’s decision to absorb an increase in energy costs is crucial to the recovery observed as, otherwise, the outlook would have been more challenging for hospitality.
Air Malta, he added, must crucially continue to be safeguarded to preserve routes to the country and to continue to build up the conference industry during the winter months.