Inbound tourism

Now that the July 2025 inbound tourism figures have been published, we can see that from January to July 2025 Malta got just over 2.2 million tourists. With the amount of tourists that Malta gets between January to July usually representing about 55% – 56% of the total for the year, all is in line to hit some 4 million inbound tourists by year end, as this column had predicted much earlier in 2025.

However, as normal for this column, I periodically publish the real expenditure per tourist figures. As shown below the real expenditure per tourist figure is improving steadily year on year from 2023 to 2025, but it is still slightly below the 2019 level. In this case the real expenditure per tourist for January to July 2025 is 1.6% below the level for the same period in 2019.

A recent researched article published by the Central Bank of Malta outlined that airfares to Malta have experienced a significant and persistent inflationary surge. In April 2025, air passenger transport inflation was up 46% compared to the previous year, with similarly high increases of 42% in May and 25% in June. This trend is notably more pronounced and prolonged than in the wider euro area. This escalation was primarily driven by a combination of strong demand and supply-side constraints. The post-pandemic tourism boom has led to passenger numbers growing at a much faster rate than airlines could increase their available seat capacity. This imbalance when compounded by rising operational costs for airlines, including elevated jet fuel prices, is pushing airfare prices up. Looking ahead, the researched article mentioned that it is projected that this airfare inflation will remain high through the first half of 2026 before gradually easing toward its long-term average by 2027. A separate analysis from the Central Bank of Malta also indicated that ticket prices could increase by more than €10 per passenger by 2026 due to the phasing out of free aviation emissions allowances.

Since the total expenditure from tourists including also the airfare costs and taking the above trend of increasing airfares in consideration, I decided to calculate the real expenditure per tourist for January to July 2025, 2024, 2023 and 2019 excluding air fares, with the below results

As can be seen it does not seem that the real total expenditure per tourist is being affected excessively by an increase in airfares. When eliminating the real airfare expenditure (adjusted for inflation), one can see that the difference between 2025 and 2019, becomes rather minimal. This indicates that the improvement in real average expenditure per tourist in 2025, is coming from an increase in real expenditure whilst in Malta, rather than an increase in real airfare expenditure.

Moreover, it seems that while in 2024, the increase in airfares on a real basis (adjusted for inflation) was higher than the inflation rate, this has somehow reversed in 2025. This reversal could be affected by the mix of air traffic to Malta, especially if there was a shift from tourists coming to Malta through routes managed by legacy airlines and now shifting to new routes from low-cost airlines.

In conclusion, the end result has its positives and negatives.

On the positive side, the real expenditure per tourist has improved from 2023 to 2025 and is edging closer to the 2019 level (prior to the recent inflationary period). Moreover, the increase in real expenditure in 2025 (when compared to 2024 and 2023) is not really being fuelled by air fares.

On the negative side, the end result is that while in Jan – July 2025 we got 47% more inbound tourists than for the same period in 2019, the real expenditure for the period January to July 2025 has increased by 45% when compared to the same period in 2019, meaning a larger increase in tourist arrivals than real expenditure from tourists. With an outlined cap of 4.5 million tourists in the Malta Vision 2050, this becomes more relevant, as with Malta already hitting 4 million inbound tourists in 2025, the increase in real tourist expenditure has to come from an increase in the average real expenditure per tourist rather than an increase in tourist numbers. When I look at all this, if one is to believe the 4.5 million tourist cap set by Malta Vision 2050, I fail to understand the rationale behind the increase in bed nights being fuelled by new permits for new hotels that keep being dished out.