The Malta Chamber of Commerce has called for a moratorium on new applications for tourism accommodation properties in a bid to counteract a predicted oversupply in hotel beds. 

The recommendation was made during the chamber’s launch of its vision for the future of the tourism industry, following consultation with stakeholders, including some of its members as well as industry experts. 

Based on data from the Malta Tourism Authority, the Chamber's research, carried out by Seed, found that there were 55,597 licensed tourist beds available in 2019, and that licensed bed stock could go up to 100,000 by 2030 if all tourist accommodation projects currently in the pipeline materialise.

Based on ‘best-case scenario’ projections, with an expected 3.2 million tourist arrivals a year by 2030, this would result in 22.4 million guest nights, which is 14.1 million nights short of the projected capacity.

“This will result in an unprofitable occupancy of 61.3 per cent. Adjusting for those who would stay in private non-rented accommodation, currently, 16 per cent of all guest nights, this would result in the excess capacity of available bed nights to increase to 17.7 million. Adding unlicensed bed-stock would dilute occupancy even further, which according to the consultation document would stand at close to 50 per cent,” the report says.  

The Chamber is also urging those with pending applications to rethink their investment plans and find more sustainable ways to grow their business. 

Plans for a number of large-scale hotels have made headlines this past year, including the approval of the controversial db Group project in Pembroke, approved plans for an 81-room five-star hotel on the site of the former Tattingers nightclub in Rabat and construction magnate Joseph Portelli saying he has plans to build a 500-room hotel on the site of the former Jerma Palace Hotel in Marsascala. 

Last month a report on the state of tourism presented at the National Tourism Forum found that the industry was already facing a slowdown before the onset of the effects of the COVID-19 pandemic. It pointed towards an increasing supply of accommodation as one of the factors contributing towards a decline in profitability.

The Chamber said that the moratorium should come into effect immediately, and added that permits that have already been granted but are still at the planning stage should be reviewed by the MTA, offering investors incentives to revise their plans and find other ways to grow sustainably. 

The Chamber's report is based on eight themes; branding and marketing; digital innovation; accommodation; sectoral infrastructure; culture and identity; governance and institutions; human capital; and connectivity. 

Special protection status for Gozo

In a bid to provide more unique experiences for tourists, the report also recommends that a strategy be devised for Gozo and a stop is made to “any development from further undermining Malta’s natural and cultural assets”. 

“Gozo deserves special protection status in this regard to conserve what ultimately makes it unique and different from Malta.”

Further encroachment of ODZ land must be halted to preserve the islands’ natural and cultural assets, the report says. 

Among its other recommendations, the Chamber is also recommending that VAT on all tourist services be reduced to seven per cent unless that service is already tax-exempt, and that the  funds should be allocated to improving salaries in service industry jobs.

“With this Vision, The Malta Chamber believes Malta will solidify its place as a quality, year-round destination of the highest standard at the forefront of international industry trends,” Chamber CEO Marthese Portelli said.