Moratorium on capital repayments by hotels announced

The government has reached agreement with the banks whereby they will grant a moratorium on capital repayments on pending loans by hotels, Parliamentary Secretary Mario de Marco said this afternoon.

"In this way hotels will have more cashflow to help them in these challenging times," Dr de Marco told a press conference.

Quoting the World Tourism Organisation, he said the current international situation was not a crisis in tourism, but a crisis which could affect tourism. People still wanted to travel but the economic scenario was affecting their ability to do so.

He said the moratorium was agreed in talks between the government, the banks and the Malta Hotels and Restaurants Association (MHRA).

MHRA president Kevin DeCesare thanked the government and the banks for this "well needed measure" . He said hotels could now concentrate on marketing to bring more tourists at a time when they were being more selective. He expressed confidence in Malta's resilient 50-year-old tourism industry and said he believed that within six to nine months the stimulus packages being introduced around the world, as well as measures being taken in Malta, such as the introduction of new air services, would help the local tourism industry.

The moratorium, in force for a year, will apply to all hotels which have invested to develop or refurbish their facilities. However it is not automatic and each case will be considered by the banks on a case-by-case basis, depending on track record. Banks also have to be satisfied that capital retained would be used in the best interest of the company.

The press conference was attended by representatives of the banks who underlined their commitment to support their clients, particularly in challenging circumstances.