‘Only divine intervention can solve some bottlenecks created by tourist over-capacity’ – Tony Zahra

The president of the Malta Hotels and Restaurants Association (MHRA) Tony Zahra said that some of the bottlenecks created as a result of tourist over-capacity can only be solved by “divine intervention”.

Zahra spoke to The Malta Independent on Sunday following a Deloitte survey commissioned by the MHRA which found that tourism numbers will need to rise by more than one million visitors over the 2023 levels for the same occupancy levels to be retained.

The report, which was made public last Friday week, indicated that with 2023 statistics showing that nearly three million tourists visited Malta, tourism arrivals would have to top four million for the occupancy levels to be kept up.

Two years ago, Deloitte had estimated that there would need to be 4.7 million annual tourist arrivals in order to retain 2019 occupancy levels.

Tourism was not the sole focus in last Monday’s general budget estimates for the sector in Parliament, with Tourism Minister Clayton Bartolo facing heavy scrutiny over a Standards Commissioner report which found that his then-girlfriend was given a lucrative consultancy role she had no qualifications for.

PN MP Mario de Marco went so far as to say that Bartolo is “dishonouring” the tourism industry and said that there are several challenges which need to be addressed economically and across all sectors, especially the economic growth, and infrastructure pressures due to the overpopulation model.

De Marco also said that the country’s infrastructure cannot keep up with the influx of tourists, which has a strain on public healthcare, education, sea drainage, traffic congestion, overcrowding, lower quality of services, stressed electricity and water systems, urban sprawling and poorer air quality.

Zahra was asked if Malta can absorb all the difficulties brought about if the tourism numbers keep on rising, to which he said that the report commissioned by the MHRA took a “snapshot” of beds available in the market, and those in the pipeline, to see if there were any differences from three years ago.

He said that the study conducted in 2022 was done to see whether certain hotels have closed down, whether others opened, how many licences were withdrawn, and others.

“If we want the 80% occupancy rate of hotels we had in 2019, with the number of beds we have, we need 4.7 million tourists. The next thing one has to ask is whether the country can sustain 4.7 million tourists?” Zahra said.

Zahra brought up the example of excess drainage into the sea around St Paul’s Bay and Bugibba, which he said are due to over-capacity.

Zahra said that the only way this problem can be solved in the area is to take apart all the roads and install a new drainage system, given that the number of people in the locality continues to increase.

“This can be done, but is it feasible without breaking and killing all you have?” Zahra said.

He said that there are a number of bottlenecks created by tourism over-capacity, some of which can be fixed through effort, while others, “only divine intervention” can solve them – such as beaches which are already over-capacity.

Asked if the MHRA will be coming up with a strategy to discuss with the government on a strong tourism policy which generates profit, but at the same time, safeguards the country from all the problems which brings with it, Zahra insisted that the MHRA is a lobby group, and it has already done over-and-above what was required of it.

“We gave the government more than it needed. The government should have been the one to do the carrying capacity study,” Zahra said.

The report also showed that a significant portion – almost half – of private holiday rental accommodations are operating without the required licences.

It showed that an analysis of the platforms, Airbnb and VRBO, found that there are around 10,043 properties of this nature listed on the local market. Yet as of 2023, the Malta Tourism Authority issued 5,771 permits for these “holiday-furnished premises”.

“Hotels are losing revenue,” Zahra said.

He urged the government to “take those Airbnbs”, which are currently unlicensed and regulate them.

“An unlicensed Airbnb saves 35% of its costs, in terms of licensing, compliance, VAT and more. This creates an unlevel playing field,” Zahra said.

Zahra stated that European law permits the government to mandate operators of such platforms and businesses to provide all requested information, failing which they could face fines.