Tourists boost Malta’s economy by €663 million between April and June 2023

Malta’s tourism industry hit the ground running in 2023, with an estimate of 841,000 tourists having arrived during the second quarter of the year. Collectively they have contributed €663.1 million to the economy, over €50 million more than in 2019, before the COVID-19 pandemic.

The Malta Hotels and Restaurants Association (MHRA) presented the Deloitte – BOV Q2 2023 performance review for hotels which showed promising figures for the year relative to 2019.

Michael Zarb, director, and economic and policy advisory at Deloitte, said that “Unless demand weakens during the rest of the year, we appear on track to reach or even exceed 2019 levels.”

During the second quarter of 2023, tourists spent roughly 25 per cent more than they did in 2022, and nine per cent more than they did in 2019. The largest increase in expenditure was related to accomodation, which increased by roughly 22 per cent compared to 2019.

However, MHRA president Tony Zahra reminded that there are multiple areas of stress in the overall tourism product, adding, “the key concern here is that, without investments to better deal with higher volumes, Malta’s market positioning might decline, requiring ever higher volumes, and a larger environmental and societal footprint, to sustain the existing economic and financial performance.”

The occupancy rate also hit new highs during the second quarter of 2023, reaching 78.3 per cent for five-star hotels (0.3 percentage points more than 2019), 88.8 per cent for four-star hotels (one percentage point more than 2019) and 93.4 per cent for three-star hotels (5.9 percentage points more than 2019).

Mr Zahra also referred to the challenges faced by the industry, not only regarding an increase in operating costs but also in relation to the sustainability of the results received thus far.

In spite of an increase in payroll and food and beverages costs, compared to 2019, gross operating profit per available room increased by 27 per cent for five-star hotels and 7.3 per cent for four-star hotels.

“Given the size of our country we must now concentrate on doing things better not bigger,” added Mr Zahra.

He added that the Government along with the private sector should focus on sustainability initiatives, such as developing better energy and wastewater management, cleaner surroundings, and making the experience of being in Malta better for both those living in it and also visiting.

He also called for better governance, and management of the population and workforce.

“We need better and more clever investment both by the public sector and the private sector, but equally important better and more clever management on all fronts,” said Mr Zahra.