The Malta Hotels and Restaurants Association (MHRA) presented the BOV-Deloitte Hotels’ Quarterly Performance Review for the overall and forth quarter results of year 2022.
Raphael Aloisio, Deloitte Financial Advisory Leader, stated that after a difficult first quarter, tourist arrivals gained momentum in the last 3 quarters of the year. On a cumulative basis, tourist arrivals for the whole year reached 83% of 2019 levels denoting a strong rebound from the Covid pandemic period. He also stated that the average length of stay in 2022 was marginally higher than that registered in 2019 and cumulative guest nights reached 85.4% of 2019 levels. Tourist average daily spend reached €121.86, which is 9.4% above the level of spend registered in 2019. Total tourist expenditure in 2022 reached almost 91% of that achieved in the comparable period in 2019.
With reference to occupancy levels, the 5-star occupancy levels in Q4 reached at 56.5%, equivalent to nearly 82% of 2019 occupancy rates. Occupancy levels for the whole of 2022 reached 75% of 2019 levels. The average is impacted by the very low occupancy rates registered during the first quarter of this year due to ongoing Covid-19 disruptions and restrictions. 4-star hotels registered occupancy levels of nearly 75% in Q4, which is 8.5% lower than 2019 levels. With an average of 72.1% occupancy rates for the whole of 2022, operators reached 87% of 2019 levels. For the second consecutive quarter, participating 3-star hotels recorded an improved performance when compared to the same periods in 2019. The average occupancy in Q4 reached 69%. The 2022 figures reached nearly 86% of occupancy levels reported in 2019.
In Q4, reported Average Daily Rates (ADR) for the 5-Sar category hotels were €172.1 or 13.6% higher than the rates registered in 2019. For the year, 2022 ADR was 13.2% higher than that reported during 2019. The strong rate of €120.8 in Q3 and continued upward swing in the last quarter enabled 4-star hotels to surpass the rates achieved in 2019 by 4%. A similar pattern was noted in the 3-Star category hotels with strong rates reported in the third quarter, and slightly lower rates in the last quarter when compared to 2019. 3-star hotels concluded the year with stronger rates than those achieved over 2019.
With reference to gross operating profit per available room (GOPAR), Deloitte reported that the strong occupancy levels in Q3 2022, coupled with stronger room rates, higher food and beverage spend, and tighter control over expenses enabled 5-star hotels to contain their decline in gross operating profit per available room for the year to less than 14% below 2019 levels. In the fourth quarter of last year and the whole of 2022, 4-star hotels registered GOPAR rates which were 63% and 79% respectively of those registered during the comparable periods in 2019.
In general, over results for 2022 demonstrate a strong recovery however profitability remains lower than that registered in year 2019. The reasons for this outcome may be explained in terms of increased supply of accommodation and an overall increase in costs.
MHRA President Tony Zahra stated that the hospitality sector is on the right path for recovery but it’s important to recognise the new challenges ahead to maintain a positive momentum and get back to 2019 performance levels soonest. Mr Zahra emphasized the importance of sustainability, by referring to challenges related to increasing costs and supply of accommodation which could impact on levels of profitability. Mr Zahra reiterated how important was Government’s decision to take over the increase in energy bills as otherwise the outcome would have been extremely challenging as can be seen in other countries. Mr Zahra also emphasized the importance for connectivity, by referring specifically to the latest developments at Air Malta, stating that it is critical that Air Malta continues to fly. He also emphasized that Air Malta plays a very important role in the sustainability of the MICE sector – a key contributor to the performance of hotels especially during the winter season.
Minister of Tourism Clayton Bartolo also addressed the conference and stated that "In sum the facts speak for themselves. As it were, our tourism industry had received the best possible financial vaccine against the covid-virus. The recovery results are truly proving this. To ensure more success we will work harder to bolster air connectivity, sustain MTA’s marketing in efforts in primary and secondary source markets, while pursuing our investment in the regeneration of tourism hot spots to assure that Malta continues to elevate its hospitality experience in the years to come.”