Average room rates in Malta’s five-star hotels reached €198 in Q2 2022, an increase of 12%

Malta’s five-star hotels saw the steepest rise in average daily room rates during the second quarter of 2022, or between April and June, reaching an average rate of €198. This translates into an increase of 12 per cent over the rates registered in 2019.

For context, four-star hotels reported an average daily room rate of €89.2, enabling them to surpass the rates achieved in the first six months of 2019 by four per cent.

Three-star hotels on the other hand reported a rate of €72.9 for the same period, which was 2.5 per cent below 2019 rates.

The figures come to light through a Malta Hotels and Restaurants Association (MHRA) performance review for the first half of 2022, commissioned to big-four firm Deloitte.

The results of the MHRA BOV Deloitte Hotels Performance Review for Q1 and Q2 2022 were presented at the AX Palace Hotel in Sliema on Friday.

MHRA President Tony Zahra stated that the economic recovery from COVID times for the hospitality sector is now gaining momentum yet there are other challenges which are emerging, amongst other those related to climate change, the war, global inflation and shortage of skilled staff.

Mr Zahra specifically referred to connectivity and the challenges that the aviation industry is facing right now, the chaos at all airports and the inability of the airline industry to ramp up staffing levels to meet the strong demand.

The MHRA President stated that: “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 euros per passenger tax.”

He also asserted that collectively we have to work towards a sustainable tourism, travel and hospitality industry and we must do this through innovation.  “Indeed we need to train people to be innovative and smart – that will define our industry for the future”.

Key highlights from survey –

After a difficult first quarter, tourist arrivals gained momentum in Q2 and reached 86 per cent of 2019 levels for the quarter.

On a cumulative basis, tourist arrivals for the first six months of the year reached 75 per cent of 2019 levels.

Average length of stay in 2022 was marginally higher than that registered in 2019 and enabled cumulative guest nights to reach 78 per cent of 2019 levels.

Tourist average daily spend reached €109, which is 2.5 per cent below the level of spend registered in 2019.

Total tourist expenditure in the period January to June 2022 reached 76 per cent of that achieved in the comparable period in 2019.

At 25.4 per cent, 5-star occupancy levels in Q1 were more than 50 per cent below the levels recorded in 2019.

The strong pick up in Q2, enabled 5-star hotels to reach 62.1 per cent occupancy, 80 per cent of the 2019 levels.

Occupancy levels for the first half of the year reached 67 per cent of 2019 levels.

In Q 1 4-star hotels registered occupancy levels of 40 per cent or 67 per cent of 2019 levels.

In Q2 occupancy levels reached 81.8 per cent or 8 per cent below 2019 levels.

At 64 per cent, occupancy levels for the period January – June were 80 per cent of 2019 levels.

Participating 3 start hotels recorded an average occupancy level in Q 2 of 78.9 per cent or 9 per cent below 2019.

5-star hotels reported an average daily room rate of €117.7 in Q1, which was on par with the rate registered in 2019.

In Q2, reported ADR increased to €198 or a 12 per cent increase over the rates registered in 2019.

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

In Q2, participating 3-star hotels nearly attached the average rates achieved by 4-star hotels and reported a rate of €72.9, which was 2.5 per cent below 2019.

The strong occupancy pick up in Q2, coupled with a fairly strong room rate, higher food and beverage spend, sustained covid supplement (up to May 2022), and tight control over overheads enabled 5-star hotels to contain their decline in GOPAR to 12.5 per cent below 2019 levels for the 1^st six months of the year

For similar reasons as those highlighted for 4-star hotels, 4-star hotels managed to achieve a GOPAR 0f 79 per cent of the GOPAR reported in the first half of 2019.