New one-star and two-star hotels barred, height exemption for hotels removed in new tourism rules

A reform hitting the hospitality sector this June will stop all new development applications for one-star and two-star hotels, as well as all-inclusive resorts and most hostels, from being considered for development.

Approaching this summer season is a set of new rules that will be re-shaping several aspects of the hospitality sector across Malta and Gozo, affecting all types of tourism accommodations, including hotels, boutique hotels, and short-term rental properties.ADVERTISEMENTPlayFullscreen0:01-0:28Mute

These new regulations were published on Wednesday via a legal notice, under the Malta Travel and Tourism Services Act.

On Wednesday, Deputy Prime Minister and Minister for Tourism and Foreign Affairs, Ian Borg, announced several new rules that will be affecting the industry as a whole and the short-let scene in particular. Minister Borg said that these regulations look to keep raising the standard of tourist accommodations across the Maltese islands.

“The new regulations will close enforcement gaps and align existing regulations with the Maltese Islands’ strategic shift towards a higher-value tourism offering, while safeguarding the wellbeing of local communities,” Minister Borg said.

In a bid to promote Malta as a higher quality destination, these laws will stop tourism authorities from licensing new all-inclusive and tourist villages. These new rules will also stop applications for one-star and two-star accommodations from being filed altogether.

Minister Borg remarked that through these regulations, “which will raise standards across all accommodation categories,” Maltese authorities are ensuring that visitors’ expectations continue to be met and exceeded.

As part of this reform, only hotel applications with not more than 200 rooms will be considered once these changes are officially in force; this will also act as an expansion cap for hotel extensions and redevelopments. In addition, guesthouses will be limited to having not more than 20 rooms; they must also be located in Urban Conservation Areas (UCAs) and in either a Scheduled building or one with distinctive architectural characteristics, and only if the development will preserve the property’s architectural heritage.

The only applications for new hostels that will be considered for approval are ones of an educational nature, inside residential zones, with a maximum of 40 beds.

These new regulations will also introduce new conditions over the entire sector, with specific focus towards the short-let industry.

These changes are also removing the exemption that has allowed hotels to construct an additional two storeys over local plan limits. This means that new applications will no longer be allowed to rise two floors higher than stipulated, extending also for existing hotels looking to expand upwards.

They will also impose for all apartments being rented out to tourists to include air conditioning.

These new laws, for the first time, are introducing the labels of boutique hotels and luxury boutique hotels into Maltese legislation, thus encouraging further investments in these upscale accommodations.

Two new accommodation labels are also being introduced: “Heritage” and “Diffuso” types. Diffuso accommodations are hotels or guesthouses operating across multiple converted buildings located within the same UCA, all in the proximity of a central building housing the main, central facility. “Heritage Hotels” will refer to three-star, four-star, and five-star hotels and guesthouses in buildings of historical importance, according to the relevant authorities, that have had their distinctive heritage features adequately preserved.

Significant changes to short-let rentals

Minister Borg shared that for all short-lets, as part of these changes coming into force this June, their owners or operators will be obliged to display their licence numbers on a sign outside the property, along with its owner’s name and phone number. This sign will need to remain on display at all hours so that they may receive complaints or be notified about certain issues at all times.

For properties forming part of a condominium, owners, once they are issued with a valid MTA short-let licence, will be obliged to provide this information to the residential block administrators as well.

A 10-person cap will be imposed onto all short-lets. These types of accommodations will also need to submit and provide a waste collection management plan, among other related requirements.

The Minister stated that all short-let operators caught without an authorised licence will be liable to a three-year disqualification, plus extra applicable penalties.