MHRA reports agreement with government to soften utility tariffs hike

Agreement has been reached in principle between the government and the Malta Hotels and Restaurants Association on ways to soften the impact of the increase of the utility tariffs on the tourism industry, the association's president, George Micallef, said today.

He said that an announcement would be made once the finer details were ironed out.

Mr Micallef said the problems in the tourism sector were mainly two. Firstly, operating costs were increasing at a rate which could not be absorbed through increases in the rates of services offered, as the market remained very price sensitive.

Secondly that room rates were decreasing to a level which was leading certain sectors of the industry to become unsustainable.

He said that since the announcement of the rise in the utility rates, the MHRA has held a number of meetings with the Minister of Finance and Parliamentary Secretary for Tourism to address these two problems, by ensuring that the government invested more money to entice more seat capacity from new regions, supported with marketing campaigns.

Secondly, the MHRA proposed a number of mitigation measures to help soften the impact of the increases on the hotels and restaurants sector until the market situation improves.

Agreement had been reached in principle and Mr Micallef said he hoped that once the finer details were confirmed, an announcement could be made in the coming days.

Mr Micallef made his remarks at a half day conference for the restaurants sector to discuss a number of issues affecting the sector during these challenging times.

He underlined the importance of the restaurants sector within the tourism industry, not just in terms of its significant contribution to tourism earnings and employment generation, but also in terms of the overall experience to visitors and that of local patrons.

He further stated that what clearly came out from the conference was the importance of maintaining standards and that of offering value for money whilst remaining competitive.

Mr Micallef said that costs were rising at a rate that may render a number of operators in this sector unsustainable. The rise in the utility rates was, on its own, estimated to cost the restaurants sector collectively an additional €1.8 million annually, Mr Micallef said.