4.7 million tourists needed to cater for expected increase of hotel beds

Last Updated on Thursday, 22 September, 2022 at 12:42 pm by Andre Camilleri

A study by the Malta Hotels and Restaurants Association shows that Malta will need to bring in 4.7 million tourists to cater for planned increase of hotels. This is almost double the 2.8 million tourists Malta received before the Covid-19 pandemic.

This study, called ‘Carrying Capacity Study for Tourism in the Maltese Islands’, was commissioned by the MHRA and conducted by Deloitte. It was financed by the European Social Fund, Operational Programme II and the NGO co-financing fund 2022.

The study reviewed planning authority permits for hotel bed stock which have not yet been approved. It found that Malta would need 4.7 million tourists, staying an average just under 7 nights, to cover 80% of their occupancy.

Deloitte said that the expected addition of tourism occupancy could result in low occupancy which will damage the sectors profitability. Overall this could threaten Malta’s financial and economic stability.

It also said that to reach the same occupancy rates of 2019, there would need to be around an 80% increase in arrivals over the next 5 years. With the expected supply growth, Malta will not be able to keep up with the recovering air-connectivity.

“We are really trying to stretch our tiny island to its maximum capacity,” said Financial Advisory Director for Deloitte, Michael Zarb.

The study also raised concerns over whether Malta will be able to cater for more tourists. In 2019 it was recorded that certain tourism areas were overcrowded. These include popular beaches, historical areas and urban areas.

As a result, it recommended prioritising tourism management in hot spots and implementing mechanisms to control visitation to vulnerable sites.

The study revealed that the drastic increase can negatively affect the quality of life for Maltese residents further. In 2019 studies were done on the undesirable effects of the volume levels which lead to stress. Deloitte suggested that improved tourism management and focused investments are required to sustain growth.

The study also raises concerns over whether Malta’s infrastructure can withstand a drastic increase in tourism. It brought up the sewage system which is clearly already strained. It was found that the sewage system is working beyond its designed capacity in certain key tourism areas.

The study showed that, already at 2019 volume levels, various quantitative and qualitative indicators were suggestive of an undesirable level of stress on key limiting factors that impact both the tourism experience offered in Malta as well as the quality-of-life of residents.

Such limiting factors include the country’s broader infrastructure, particularly in regard to the sewage network in certain areas, broad environmental impacts concerning specific tourism hotspots as well as more indirect matters associated with the sector’s unsaturable thirst for expat workers and resulting urbanization pressures.The study also reveals that with the current rapid tourism growth, Malta will not hit the EU’s greenhouse gas targets.

Also, the study questioned whether Malta has the labour force to handle the drastic increase in tourism. The total number of Maltese working in the tourism industry in 2010 was 7,974. This reduced to 5,964 in 2019, which meant that only around 40% of workers within the tourism industry were Maltese.

Moving forward, all recommendations have to do with finding the right balance for sustainable tourism growth.

Addressing the event Minister for Tourism, Clayton Bartolo said the tourism industry is one in which “one can never stop thinking about tomorrow’s opportunities and challenges. Thankfully our country incorporates social partners like the MHRA that continuously spark a healthy and widespread tourism debate by encompassing government, direct stakeholders and the wider community.”

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