The Malta Hotels and Restaurants Association (MHRA) refers to the budget
presented by Minister of Finance, Clyde Caruana, as a resounding commitment
from Government to support the resurgence and expansion of the Maltese
economy in the face of ongoing global economic and geopolitical challenges.
Specifically, MHRA acknowledges the wide-ranging social benefit schemes.
In response to the budget, MHRA President Mr. Tony Zahra, remarked that in
2023, the tourism sector served as the driving force behind the economy, and
the Minister of Finance affirmed that it is expected to retain this pivotal role in
2024.
MHRA emphasizes the importance of connectivity for the industry, and
therefore, the launch of the new airline on March 31st remains a crucial
element for the industry’s success in 2024. While the budget caters to this new
initiative, MHRA notes a reduction in the subvention for the Malta Tourism
Authority.
The Budget speech however didn’t specifically mention any particular initiative
in relation to Tourism, despite that tourism faces various challenges next year,
especially further expansion of the tourist accommodation, which means
increased efforts to expand connectivity and seat capacity. MHRA reiterates
that government needs to revise tourism policy for next year and ensure that
existing incentives for more hotel development are discontinued.
Furthermore, given that the hospitality sector heavily relies on human
resources, the substantial increase in COLA (Cost of Living Adjustment) this
year could potentially impact the industry’s profitability. To counteract this,the industry must strive for productivity gains or increase per capita spending within the hospitality sector.
MHRA appreciates the government’s intervention in the energy sector,
recognizing its significance in managing industry costs and keeping inflation
rates in check through subsidies.
MHRA further asserts the importance of close monitoring of public finances,
ensuring good governance and accountability, given the projected deficit for
next year, even though government plans to narrow the negative balance
compared to this year.
MHRA reiterates its long-standing vision for the industry to enhance its
product offerings, attracting higher-spending travellers to Malta. Indeed,
private investments in the capital city have already attracted such discerning
travellers, and MHRA now expects the government to match these substantial
investments by providing both human and capital resources to enhance the
Maltese island’s infrastructure and general upkeep. In this light, MHRA express
concern that the budget refers to a drop in capital and infrastructural projects.
Labour staff shortages will remain one of the biggest challenges for the
sustainability of the sector and this needs long term planning, as a change in
the economic model was mentioned once again, but nothing was said to put
our mind at rest that our sector will have to depend on human resources.
Reference to an increase in the cost for permits in recruiting foreign workers is
deeply concerning since this will have a major negative impact on the
hospitality sector.
MHRA also points out that nothing was specifically mentioned regarding
incentives to help the tourism industry transition to meet sustainability and
climate change targets.
MHRA will be commenting in further detail as the financial estimates will be
made available to the Association for review.
