New hotels to get room caps and lose right to rise two floors higher

Updated 7.10pm

• Planning policy allowing hotels to rise higher than other buildings to be removed
• New hotels capped at 200 rooms, guesthouses at 20 rooms (40 beds) and hostels at 40 beds
• Apartments can only be converted from long- to short-let after three-month “cooling period”
• Short-lets must have owners' contact information publicly visible 

Regulations that allow hotels to exceed local plan height limits by two storeys could be scrapped under government proposals.

The new legislation, which is set to be opened to public consultation for 30 days on Thursday, also proposes capping new hotels at a maximum of 200 rooms and guesthouses at 20 rooms (40 rooms). 

It is part of a reform of hospitality sector regulation that will also see changes to short-let accommodation.

Tourism Minister Ian Borg announced the details during Wednesday's parliamentary sitting, alongside a raft of other changes.

Borg told parliament the proposed changes would incentivise investors to invest in quality rather than quantity. 

"We need to ensure that the bedstock we invest in will be sustainable in relation to the demand in the coming years."

Currently, there is no maximum number of rooms a hotel can have, and many hotels across Malta have hundreds of rooms. DB Group's Hard Rock Hotel in Pembroke, for example, will have 394 rooms when construction is complete. The AX Odycy in Qawra has over 600 rooms.

New hostels will not be allowed to have more than 40 beds. 

The legislation also includes changes to the hotel height policy, Times of Malta has been informed.

Currently, hotel developers can apply to add two storeys over and above the height limitation permitted in the site's Local Plan. The controversial policy means hotels can currently rise higher than all other surrounding buildings. 

That exception is expected to be scrapped.

“Hoteliers and the hospitality industry have been saying that Malta does not need more rooms,” sources close to the planned change told Times of Malta.

“Allowing large-scale hotel developments would mean either allowing tourist accommodation to operate with lower occupancy or the government working to bring more tourists to Malta.”

A study published in 2022 by the Malta Hotels and Restaurants Association warned that the rising supply of hotel beds means Malta will need around 4.8 million tourists a year to keep hotels at 80 per cent occupancy. 

Changes for short-let properties

The government is also planning on changing several rules related to short-term apartments, which are often booked through online platforms like Airbnb, Borg confirmed in parliament.

New rules for the sector have been on the cards for the past year, when the government first announced plans to require short-let property owners to obtain the assent of their condominium neighbours before operating. 

That proposal was scrapped shortly after Ian Borg took over the tourism portfolio, with the deputy prime minister saying the proposal struck him as unfair.  

The new plan is to dissuade apartment owners from switching to short-lets by requiring a three-month “cooling-off period” before a short-let licence is granted. Apartments must be left empty during that period.

Short-let properties will also be forbidden from hosting more than six people per property. 

Owners of such properties will also be required to attach a plaque with their name and contact information outside their short-let property. They will also be required to ensure the MTA license number is visible on the plaque, and they are reachable 24/7.

"We are not reinventing the wheel - this is common practice abroad, including in Sicily," Borg said, adding that such a requirement would ensure transparency with neighbours.