Takeaway orders are declining in popularity, while fine dining is on the rise, according to a new survey of Malta’s catering sector

The survey, commissioned by the Association of Catering Establishments, asked 250 restaurateurs representing a total of 311 catering establishments to give their verdict on Malta’s catering industry over the last six months of 2024.

It found that contrary to widespread belief that the industry is hinging on tourist arrivals, only a third of restaurant patrons were tourists. This comes despite tourist arrivals rising to over three million for the first time last year.

The survey found that the remaining two-thirds of restaurant patrons were locals.

Industry insiders described the finding as “puzzling”, suggesting it may be influenced by the ever-increasing popularity of self-catering accommodation.

Revenue declines, but not for everyone

The survey finds that the industry experienced a slight dip in revenue of some 0.6% compared to the same period in 2023. Meanwhile, profits also dropped by 1.2% during the same time period.

But some types of diners are faring better than others, with patrons moving away from takeaway and casual dining and towards fine dining, suggesting quality is winning over quantity when it comes to people’s dining habits.

Takeaway establishments struggled the most, with revenue falling by almost 5%, while casual dining saw a nearly 1% decline, the survey found.

Meanwhile, fine dining was up by almost 4%, with cafeterias and food trucks also seeing marginal increases.

Patrons spend €23 every time they dine out

Restaurant patrons spent an average of €22.74 during the last six months of 2024, a €3 drop over the previous six months with spend varying drastically between different types of catering establishments, according to the survey.

Unsurprisingly, patrons at fine dining restaurants were the highest spenders, at just over €51 per person.

At the other end of the spectrum, patrons at snack bars and takeaway establishments spent less than €14 per person.

Fewer willing to invest

But restaurateurs are increasingly seeing storm clouds on the horizon, with over two-thirds saying that they are unlikely to invest in their restaurant or open new establishments over the next year, a sharp 12% increase since the beginning of the year.

Meanwhile, over half of respondents said that they expected the upcoming year to be worse for their business compared to 2024, a rise from the 39% who felt the same way in the first half of the year.

The only exceptions to the rule were fine dining establishments, two-thirds of which said they expected the next year to bump up their sales by 10%.

Fix skills pass, sort out BCRS and decrease VAT, restaurateurs say

According to the survey, the impact of the skills pass, introduced last May, is the greatest challenge faced by the industry, known to be heavily reliant on a non-EU workforce.

ACE President Michelle Muscat. Photo: Union Press

Other challenges include the BCRS recycling scheme, an issue already raised on previous occasions by the association, and a struggle to find adequate staff.

But restaurateurs say that the issue they most want authorities to address is their request to cut VAT on food from its current 18% to a proposed 7%, a measure they say would result in more income for the government and more stable menu prices.

'Oversaturation is a concern': Ian Borg

Speaking at the survey's launch, tourism minister Ian Borg admitted that the catering industry is facing several challenges, ranging from regulatory issues to human resources. 

And the sheer number of catering establishments is also an issue that authorities need to keep their eye on, Borg said.

Ian Borg speaking on Thursday morning. Photo: DOI

"Market oversaturation remains a concern, necessitating a reassessment of the licensing framework to ensure a sustainable business environment," he said.

Speaking to Times of Malta, ACE chair Michelle Muscat said that the dip in takeaways is likely to be a return to the norm after the explosion in popularity in the aftermath of the pandemic.

"Takeaways grew more than we were expecting at a certain point in time," she said. "This is the norm – not like it was two or three years ago – so the market is stabilising".