MHRA says EU insistence on aviation fuel tax would destroy the industry

Last Updated on Thursday, 28 July, 2022 at 9:25 am by Marc Galdes

The EU’s push to charge a fuel tax on flight tickets would destroy the hotel industry, the president of the Malta Hotels and Restaurants Association, Tony Zahra said.

“Going forward we shall be facing huge taxes given the EU’s insistence on cutting fossil fuels by charging huge taxes on fuel which, given Malta’s peripheral location, could mean an extra €60 per passenger tax,” Zahra warned when he addressed an MHRA activity.

He stressed how as an EU country we are at a disadvantage in this scenario because only flights to EU countries will tax passengers.

In response to this, he argued that our way forward is through increasing connectivity. He asserted that collectively we have to work towards sustainable tourism, travel and hospitality industry and we must do this through innovation.

Airline tickets are set to go up substantially in the near future as Europe prepares to replace polluting, fossil jet fuel with sustainable aviation fuel. MEPs adopted a position on the draft EU rules that will force EU airports to have flights uplifting a minimum share of SAF, starting from just 2% in 2025, right up to 85% by 2050.

Zahra stated that as the industry is recovering from the pandemic, other challenges are emerging, among other those related to climate change, the war, global inflation and shortage of skilled staff.  

Zahra asserted that the hospitality industry had to be innovative. “Indeed, we need to train people to be innovative and smart – that will define our industry for the future.”

Survey

The number of tourists who visited Malta in the second quarter of 2022 was 86% of the total in the same quarter of 2019, before the Covid pandemic hit, a survey carried out by the Malta Hotels and Restaurants Association shows.

During a conference held on Friday morning at AX The Palace Hotel, the Financial Advisory Leader at Deloitte, Raphael Aloisio, said that recently there is a significant increase in people’s intention to book flights and holidays.

There is still a “high degree of apprehension” amongst people to fly, but he expressed how this seems to be a strong step towards achieving normality again.

In the first 6 months of 2022, the tourist arrivals reached 75% of the 2019 levels. However, in the 2nd quarter on its own, the increase was 86% of the 2019 levels.

The average length of stay in 2022 was marginally higher than that registered in 2019, which meant that cumulative guest nights reached 78% of the 2019 levels.

Furthermore, the total tourist expenditure from January to June of 2022 reached 76% of that achieved during 2019.

The average daily spend of a tourist was also very positive, reaching 97.5% of the 2019 average. This means that it is only 2.5% less than the 2019 figure, making the figure €109 a day.

Aloisio said that a study by Eurocontrol showed that by 2023 the number of flights in Europe will reach 95% of the flights in 2019. However, it will not be until 2024 that the number of flights will match the flights of 2019 in Europe.

When looking at the percentage of occupancy in hotels in 2022, the percentage is still lower than that of 2019. In 5-star hotels over the past 6 months the occupancy percentage was 67% of the 2019 levels, whereas 4-star hotels reached an occupancy level of 80% of the 2019 levels.

Five-star hotels were still encountering difficulties.

Overall, occupancy levels for the first half of the year reached 67% of 2019 levels.

In this sector, the average daily room rate was €117.7 in Q1, at par with 2019, while in Q2 this went up to €198, or a 12% increase over the 2019 rates.

In Q1, four-star hotels registered occupancy levels of 40%, or 67% of 2019 levels.

In Q2, occupancy levels reached 81.8%, or 8% below 2019 levels. At 64%, occupancy levels for the period January-June were 80% of 2019 levels.

The €49.3 rate in Q1 and the much stronger rate of €89.2 in Q2 enabled four-star hotels to surpass the rates achieved in the first six months of 2019 by 4%.

Participating three-star hotels recorded an average occupancy level in Q2 of 78.9%, or 9% below 2019.

In Q2, three-star hotels nearly reached the average rates achieved by four-star hotels and reported a rate of €72.9, which was 2.5% below 2019.

- Advertisement -