Malta is on track to see 3.2 million tourist arrivals by the end of the year, new data published on Wednesday revealed.
The same data reveals the number of tourism arrivals jumped by 30% in the first quarter of the year when compared to 2023, increasing by some 134,000 arrivals.
According to the data, some 526,000 people visited Malta in the first three months of the year, with the number of guest nights spent in Maltese hotels increasing by 481,000 compared to the same period last year.
The data was presented by researchers from Deloitte, who presented the latest numbers for the tourism industry during the Malta Hotels and Restaurants Association’s hospitality forum on Wednesday.
Spending from tourists in Malta also increased at pace by 30%, with visitors leaving €406 million in the economy during the year’s quarter.
The study suggests that if the industry continues to operate at this pace, Malta is on track to see 3.2 million tourist arrivals by the end of the year.
In 2023, Malta received over three million visitors, over eight percent higher than the previous record high in 2019- when almost 2.8 million visitors travelled to Malta.
Sector must focus on managing tourists "expectations"
Occupancy of hotel rooms also remained at a healthy pace, with 5-star hotels seeing an increase of 5.3 percentage points, 4-star hotels a 1.8 percentage point increase and 3-star hotels a 1.4 percentage point increase when compared to the same quarter in 2023.
On average, 5-star hotels charged €135.50 per room, 4-star hotels charged €61.40 per room and 3-star hotels an average of €41.60 per room.
These marked increases of 7.9%, 13.7% and 8.6% respectively.
Deloitte Financial Advisory Director Matthew Xuereb pointed out that, despite seeing improvement in both occupancy and room rates, median 5-star and 4-star operators only broke even when considering their gross operating profit, with the bottom quartile of those who reported their data ultimately making a loss.
The “elephant in the room” he said, is the availability of bedstock, which jumped by 6.2% or some 850 rooms from 2019 to 2023, with signs that occupancy has started to lag in some sectors.
Occupancy in 5-star hotels went down by 7.6% but managed to stay on top of things as the room rate has gone up by 22% in tandem.
As continued growth in arrivals will stimulate further demand for investment, Xuereb urged a concerted effort to “manage expectations”, especially when educating the market.
He said the sector must focus on offering quality, noting that higher quality properties can command higher rates, allowing them to better absorb shocks in the market.
In terms of airlines, with Ryanair becoming a major contributor to Malta’s growth in flight capacity, Xuereb questioned whether the country should remain so dependent on the carrier for its long-term growth ambitions.
Direct routes to America needed
In his address, MHRA president Tony Zahra said that maintaining air links is critical in keeping the tourism industry stable and suggested that courting the North American market more will result in higher-spending tourists.
“We need direct connections to America because the American market is the best market because they will spend the largest amount of money,” he said.
Referring to the MHRA’s 2022 carrying capacity study, which found that Malta would need 4.7 million tourists to sustain occupancy, Zahra said the country desperately needs to improve its infrastructure to reach those heights and that some of these issues could only be solved through “divine intervention”.
“It is clear that there are some areas where our decision makers must make some unpleasant decisions, but while not making any decision at all is also an option, would that be the right option?” he questioned.
Surefire ways hoteliers can work to future-proof their business is to make sure they are offering good hospitality and that their staff is well trained. The industry should also look towards artificial intelligence to see how it can improve its offering, he suggested.
Prevent residents from suffering tourism fatigue
Shadow Minister for Tourism Mario DeMarco told conference attendees that while numbers continue to provide a promising outlook, more must be done to ensure the product remains up to scratch and that local residents are not fatigued by tourism to the point that they begin to reject it.
The country’s infrastructure, specifically roads, public transport, the health sector, energy production and waste disposal, are already buckling under the strain of the growing population but pushed to their limits at the peak of tourism arrivals that could threaten to cripple the industry and the country as a whole, he said.
“Increasing tourism arrivals by 30% without planning for such an increase was obviously going to have the impact that we are seeing every day,” DeMarco said.
“I am not advocating for a cap on tourism numbers, but a planned approach to manage the country’s carrying capacity that takes into account the people who already live in Malta.”
So far, no study has suggested what the “magic number” of tourist arrivals it is the country should aim for, and this is a critical piece of information that the country must establish going forward, he added.
While this problem is not unique to Malta, DeMarco pointed out the growing movement of residents irked by tourism activities, including those protesting to reclaim pavement space from restaurants, Valletta residents pushing back against loud music played late at night and frequent complaints of a lack of enforcement.
“It is useless to continue to work on this if the community does not want to welcome more tourism,” he warned.
DeMarco said there is not enough information on what KM Malta Airlines is doing differently to prevent ending up in the same situation as AirMalta, which was forced to shutter.
He also criticised the Malta Tourism Authority for not being transparent about how it spends its marketing budget.
Government pushing focus on public cleanliness
On his end, Tourism Minister Clayton Bartolo said the government has promised to spend €6 million on new public cleansing equipment to be distributed all over Malta, but with a particular focus on its tourism zones.
He said focusing on public cleanliness will not only improve Malta's appearance but also improve it as a tourist destination.
He said the MTA is also engaged in competitive marketing practices as it is seeking out every leverage to sell the country to travellers over competing destinations.
This includes highlighting sustainability and the country’s authentic heritage values as well as diversifying into new niches, such as military tourism. He added that the cruise industry is also making positive growth in Malta this year, with the number of passengers expected to exceed the 1 million mark by the end of the year.