Budget 2011 | Competitiveness and accessibility fundamental MHRA

In a statement outlining proposals for the Budget 2011, the MHRA cautioned that the industry “cannot afford a drop in occupied bed nights or tourism expenditure” – warning that “any budget measures undermine competitiveness or accessibility…could put the entire tourism industry in jeopardy.”

“Rising costs and lower profitability have been a major concern for the hotels and restaurateurs in recent years, and the MHRA has purposely conducted an economic impact report that clearly demonstrates this pattern,” it said – saying also that report showed that Malta has “the lowest levels of profitability amongst competing destinations.“

The MHRA proposed that “no government induced costs are further introduced in the forthcoming budget, as the industry cannot continue to absorb further increases.”

“Profitability is not only necessary for the very survival of the businesses,” the association said, “but also for further investment in the tourism product, which is vital if we are to compete successfully.”

The association stressed the importance of “extended support to airlines to maintain accessibility and possibly increase seat capacity as well as new routes.”

The MHRA said that “this is becoming increasingly critical, given that Airmalta may be constrained to scale down or cancel its operations from established routes next year,” warning against the far reaching implications of such decisions.

The MHRA said that the same applies to MTA funding and support, “as the need for increased presence in the market continues to grow with the introduction of new routes and stiffer competition.”

The MHRA recognised that the process of on-going discussions with the EU regarding the future of Air Malta delicate – however “the main stakeholders need to be kept abreast of decisions taken, in order that measures to mitigate any adverse affects are put in place at the earliest stage.”  The MHRA said that this “may also require a contingency fund provision in next year’s budget.”

Amongst the MHRA’s proposals are calls on government to tackle the problem of unlicensed operators - particularly in the accommodation sector – “so as to bring to book all those that get away with not paying licences, permits, VAT, taxes, etc, whilst competing unfairly with the rest of the law-abiding operators in the industry.”

The MHRA is also urged government to find alternate ways “to provide grants to finance green technology investment schemes for the hospitality industry, as per agreement reached last March, to mitigate the impact of the rise in the utility rates, which will help restore some of the lost cost-competitiveness.”

Although it conceded that in recent years a number of initiatives have been taken to improve the environment, the MHRA recommended “that the necessary funds are made available to step-up basic matters, such as the general cleanliness, upkeep and aesthetic control, particularly in highly visited areas.”

The MHRA also affirmed that it “expects that the projects in the main tourism zones which have repeatedly been promised over the years, amongst other smaller but highly visible projects, will commence next year.”

The association also reiterated its position that the much-discussed “bed” levy “cannot be introduced in a manner which discriminates against the hotel sector or in a way that risks having to be paid by the accommodation providers, as this will further erode Malta’s competiveness.”