29 June - 5 July 2000

April tourist arrivals 'saves' first quarter figures

by Steve Chetcuti

The first three months of 2000 proved disastrous for hotels in Malta and Gozo with all categories registering lower occupancies and registering a financial loss. But the April period has proved a life-saver for the business as the arrivals figure for the first four months, around 300,000, equalled that of the same period in 1999.

The first three months of the year saw tourist arrivals drop by seven per cent while average hotel occupancy fell by six per cent. Hotel revenues also dropped from 15 per cent in the five-star category to 31 per cent in the three-star hotels.

Tourist arrival figures were also dismal for the first quarter but the results were still higher that the same periods between 1995 and 1998. In total, Malta welcomed 182,000 tourist compared to 196,000 last year.

The British market continued to drop and registered an 11 per cent decrease. But this was compensated for by the German, Scandinavian and Libyan markets which grew by 13,000 arrivals

The figures were released yesterday during a presentation of the quarterly surveyed commissioned by the Malta Hotels and Restaurants Association and carried out by Deloitte & Touche.

Survey participation increased by 55 per cent over last year and now has a representation of 10,050 rooms.

Deloitte & Touche director Nick Kaptur said occupancy in five-, four- and three-star hotels dropped respectively by 10 per cent, two per cent and 12 per cent. This was due, Mr Kaptur explained, to a weak February and late Easter.

Five-star hotels registered a significant increase in revenue per occupied room, from Lm47.87 in 1999 to Lm62.20 this year. This, Mr Kaptur explained, reflected higher in-house spending and a maximisation of non-core business.

Three-star hotels also saw the revenue per occupied room increase slightly from Lm9.18 to Lm9.30 but four-star hotels dropped by Lm0.46 to Lm19.68.

The revenue per available room showed five-star hotels increasing from Lm25.18 to Lm27.60, Mr Kaptur said but both four- and three-star hotels dropped from Lm12.74 to Lm12.01 and Lm6.52 to Lm5.47 respectively.

Average hotel rates for five-star hotels register a staggering 27 per cent increase from Lm22 last winter to Lm28 during the first quarter of 2000, Mr Kaptur said. And two hotels in the category had also broken the Lm30 rate barrier suggesting that five-star hotels are attracting better quality business.

Four-star hotel rates ranged between Lm4 and Lm18 while the three-star rate mean was between Lm2 and Lm9, Mr Kaptur said.

Occupancy levels also varied drastically. The five-star hotels had occupancy levels ranging from 10 per cent to 59 per cent in the first quarter, while four-star highest and lowest were 25 per cent to 77 per cent and three-star establishments ranged between 22 per cent and 80 per cent.

Gozo five-star hotels were half as full as their counterparts in Malta, 23 per cent compared to 49 per cent. Rates in the latter were also considerably higher, Lm29 against Lm19.

Mr Kaptur said within the four-star category, room rates in the Sliema area were the best but occupancy in Bugibba was better.

Payroll cost increased across the board because, despite the decreased occupancy, manning levels could not be dropped. This reached 66 per cent of total cost in the four-star category. Mr Kaptur said operating increases also increased painting a bleak financial picture for the industry.

"While hotels might normally try to operate the winter season at break-even, this does not appear to have been the case this winter putting pressure on expectations for summer 2000," Mr Kaptur said. This was further aggravated by the weaker-than-average last quarter in 1999, he added.