‘If you create overcapacity, the market is going to suffer’ – MHRA President

President of the Malta Hotels and Restaurants Association Tony Zahra sticks by his statement that tourist numbers should not be limited, however indicates that bed supply can be.

Malta received 4,022,310 tourists in 2025. Mr Zahra has, in the past, dismissed the idea of limiting the number of tourist arrivals and argued that management is the key to sustaining the sector.

“I still believe there should not be any limit because I do not believe that the Government should interfere in the market. However, the Government should regulate the market,” Mr Zahra tells WhosWho.mt.

“If you create over capacity in anything, then the market is going to suffer.”

As an example, he mentions that the Government limits the number of pharmacies. The Pharmacy Licence Regulations read that in every town or village the number of pharmacies shall not exceed the ratio of one pharmacy for every two thousand five hundred inhabitants.

“Why are we limiting pharmacies, and why are we not using the same yardstick in the tourism industry,” Mr Zahra explains.

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He says that one can limit the number of tourism beds available.

Asked whether he would expand this to the wider tourism sector, like restaurants, Mr Zahra says: “Absolutely. You do that not only through regulation, but through incentives. For example, I have spoken a lot about having a balanced economy. A balanced economy means not only having the tourism sector or the financial services sectors for instance, but also manufacturing.”

This is done by incentivising the area government wants people to invest in, “and possibly making fewer incentives on those that you don’t want people to invest in. So use that method of incentivising areas where you want investment, and not incentivising areas where you don’t want investment.”

Queried as to whether limiting the amount of bed space, and thus hotels, could bring about arguments of favouritism towards existing hotel owners,  when limiting the number of tourists would have the same final result without such arguments, Mr Zahra stuck by his argument.

“If you’re going to allow over capacity, what is going to happen is that there will be a race to fill up the empty beds, and that will be on a price basis. Consequently, your possibility of offering a good service will decrease with the amount of money that you’re charging. So it’s not a question of limiting the numbers coming in. It’s about limiting the supply.”

Regarding Malta’s capacity to handle the number of tourists it has been receiving, and if the country already reached a point where his idea needs to be implemented, he says that the service industry, by its own nature, requires people to operate.

“You can’t bring in Artificial Intelligence, because industry requires people. There are certain areas where you can, but we’re talking about small percentages. So we really need now to think differently. If we’re not going to think differently, if we’re going to think in terms of what we’ve done in the past, then we’re going to have a problem.”

The size of the island is not going to grow, he said.

Queried about the country’s push for more tourism in the shoulder months, he said that the country has seen a lot of success in increasing tourism numbers in those months.

“What were termed the shoulder months are now part of the peak months. In the old days, we used to think of the shoulder months as being September, October and April, May, June. These are no longer shoulder months, they are peak months.”

As for whether the country should be aiming to reach the 5 million tourist mark, Mr Zahra says that the government has to decide on that.

“The question is, not, should we be aiming to attract 5 million? The question is, what will the impact on the island be if we reach 5 million?”

He said that the MHRA issued a carrying capacity report a few years ago and identified the areas where there are difficulties. “Some of them we could possibly work on and solve. But for others, it’s impossible.”

The report indicated that beaches were saturated at that point in time. “This was around three or four years ago. We’re not going to create your beaches. And if they were saturated at a point in time when we had about 3.5 million or 3 million tourists, what will we do with 5 million, build double-deckers on the beach?”

He made the argument for attracting higher quality tourists. “If you get a one person spending 100 euros per day, you have the impact of one person. If you get 10 persons spending 10 euros each, and you’re earning 100 euros, you have the impact of 10 persons, not one person. Now, which one would you rather have?”