More major events needed to boost hotel revenue, study shows

More major specialised events are needed to boost average room revenue and hotel occupancy, a study commissioned by the Malta Hotels and Restaurants Association (MHRA) found.

The study, carried out by Deloitte, found that in November, five-star hotels reported a 16.1 per cent drop in the average daily rate, while four-star hotels reported an 8.3 per cent drop in occupancy in November, compared to the same month a year earlier.

Deloitte Malta's Transportation, Hospitality and Services leader, David Delicata, who was presenting the findings at a conference on Friday, explained that this drop was mainly due to the fact that in November 2024, SiGMA held its conference, whereas in 2025 it was held in September.

In the fourth quarter of 2025, the average daily rate at five-star hotels fell by 2.8 per cent while occupancy rose by 3.2 per cent. The opposite was reported for four-star hotels, as occupancy dropped by 3.8 per cent while their average daily rates increased by 9.2 per cent.

“This shows the importance of attracting quality tourists through events to maximise the rate and yield of what we are selling,” Delicata said.

That being said, overall, both five- and four-star hotels reported higher average daily rates and occupancy rates throughout 2025 compared to 2024.

The study also showed that the cost per available room for five-star hotels in the final quarter of 2025 increased by 10.4 per cent, reaching 68.9 per cent, compared to the same period in 2024. This increase in costs was reflected in five-star hotels’ gross operating profit margin, which dropped by 2.6 percentage points to 31.9 per cent for Q4 2025.

For the full year, costs for five-star hotels increased by 6.9 per cent, which meant that the gross profit margin increased marginally by 0.4 percentage points, reaching 36.4 per cent.

Tourism Minister Ian Borg, who was present at the event, took note of the need for more major events moving forward.

“The Malta Tourism Authority has strategically realigned its sponsorship and marketing investments to prioritise value-added events that celebrate Malta and Gozo’s distinct cultural and heritage assets, particularly during the off-peak months,” Borg said.

Malta looking to attract more long-haul markets

Borg said that figures show tourism continued to grow in 2025, especially during Malta’s off-peak season, while also attracting older tourists “who are more likely to have higher spending power”.

Tourism Minister Ian Borg. Photo: Chris Sant Fournier

Tourists aged 45 and over increased by 67 per cent, while those aged 24 and under grew by 3 per cent and the 25–44 bracket by 9.4 per cent.

The minister mentioned the direct flights between Malta and New York, which are set to begin in June, and said the government is looking to attract “more routes to other long-haul markets”.

Following a public consultation on a new regulatory framework for hotels and short-term rentals, Borg said this will soon be introduced.

“You are not simply service providers; you are Malta’s frontline diplomats. Every check-in, every plated dish, every guest interaction contributes to our national reputation,” he said.

'Value must be the mantra'

MHRA President Tony Zahra began his speech by looking back to where they started decades ago, at a time when the “industry was on its knees”.

MHRA President Tony Zahra. Photo: Chris Sant Fournier

Zahra said that in order to remain competitive, Malta must continue to embrace change and offer more “value”.

“We have managed to open a new route for the Americans, who are going to spend much more money. But they are not stupid; they will spend it if they find something to spend it on,” he said.

“If you walk down Republic Street, you would be hard pressed to find a single shop where you could spend €5,000.”

As such, looking ahead, he said that “value needs to be our mantra”.