Price surges on several products and raw materials are creating major headaches for local hoteliers as they seek to recover from two disastrous years.
A senior manager in a five-star chain estimated hoteliers are facing an average 40% increase in their expenses in the past months alone, as the world continues reeling from the impact of the pandemic and more recently the war in Ukraine.
Staffing is also an issue as the industry lost many employees during the peak of the pandemic and has not yet recovered fully.
Limited flight seats and late guest bookings are also dampening the recovery of the industry.
Price increases across the board mean that hotels have considerably higher costs than they did in 2021.
Robyn Pratt, general manager at the Phoenicia Malta Hotel, said she could not yet quantify the average overall increase in costs for the hotel but said it has become a daily challenge to keep up with the upward changes in pricing.
The manager, who has been in the hotel business for 45 years, said the industry’s challenges are far bigger than anything she had ever seen, and far harsher than the impacts of the September 11 attacks and of the pandemic itself.
Despite the daily challenges they are facing, Pratt remains optimistic that Malta can recover well in the sector in the coming months.
Staple foods like chicken, oil, wines, water, and pasta have all seen price hikes. Pratt said maintenance works and upgrades are also seeing prices rising week by week.
Management staff from other hotel chains said they have suffered an increase in prices in the cost of items such as mini-bars, safety deposit boxes and bed linen.
With hotel bookings still not reaching pre-pandemic levels, keeping prices competitive while remaining profitable remains a tricky prospect.
A spokesperson for international hotel chain Corinthia said costs are rising everywhere, not just in Malta.
The group had seen increases in most countries in the price of food, operating supplies and utilities, and inevitably prices are reflecting that too.
He said those operating in the sector have to learn to cushion the impact and live through this period of inflation.
Notwithstanding this, Corinthia is adopting an optimistic outlook and expects forecasts for 2022 to remain in line with expectations. These mark a vast improvement over the past couple of years and show that the market is well on the way to recovery from the pandemic.
The Malta Hotel and Restaurant Association said it is both realistic and optimistic notwithstanding the challenges the sector is facing.
MHRA president Tony Zahra said the full force of imported price increases has not yet hit the hotel industry, thanks in part to the government’s intervention in keeping the cost of energy at a stable price.
Zahra said that a lot will depend on whether the government will continue its support to keep the cost of energy at the present levels.
Zahra said hotels and other accommodation owners nowadays have flexible pricing, with levels varying according to demand.
This means prices can fluctuate greatly from one day to the next and this is a method of maximising revenue by utilising resources more evenly throughout the year.
Zahra said he is satisfied with bookings for the coming months despite an inflation rate of four per cent, which will inevitably be reflected in room rates, and despite the suspension of the government wage supplement scheme from this month, which will impact the sector.
He said the association is expecting to reach just above 75% of the arrivals for 2019, which was a record year. If airline seat capacity to Malta is increased, the forecast may even be surpassed.