06 June 2007


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Low cost carriers boosting three-star market – survey

Gerald Fenech
Around 15 percent of passengers to arrive on low cost carriers have opted for two or three star accommodation with the figure rising to as much as 40 per cent for the Italian market, an internal survey report prepared by the Malta, Hotels and Restaurants Association and which is in possession of Malta Today says.
The report indicates that although supply and demand in the three-star category has declined considerably over the years, there appears to be business growth potential in this sector with the increase in low cost carrier tourism.
In fact, the survey shows that when asked if low cost airlines have increased business for their establishments, two- and three-star owners who participated in the survey responded with a resounding 73 per cent against 27 per cent who reported no increase in business.
The same respondents paint a bleak picture for the tour operator business, with only 4.8 per cent saying that this has increased, while the bulk of 62 per cent states that this has remained the same. However, a worrying 33.3 per cent, or one third of respondents, say that this has decreased.
The report continues to state that although there are 9,762 beds promoted as four-star category by tour operators, there are actually 16,262 beds in this category. The converse applies to the three-star scenario, where 19,771 beds are promoted with only 13,271 beds available. According to the report, this anomaly is due to a number of reasons, amongst which a lack of supply of good accommodation in the three-star area, and the perceived standard of accommodation by the trade and consumer areas than that is lower than officially classified by the MTA.
Comparing occupancy rates for the winter months, the report continues to reveal a stark picture with rates dropping to lows of 8.9 per cent in January for the two-star category compared to 36.5 per cent for the four-star category. Three-star hotels reach an appreciable peak of 48 per cent occupancy in October, which compares well with the 65.8 per cent in the same month reached by the five-star category.
However, an encouraging 46 per cent of survey respondents indicate a positive outlook for their establishment. Two of the hotels surveyed, totalling 1,000 beds, plan to close down by the end of the year to be converted into old people’s homes.
Other aspects of the report indicate that the three-star sector is in urgent need of refurbishment and re-development as the level of hotel standards in this sector has seriously deteriorated. Another incredible anomaly is that development planning policies do not consider Bugibba and Qawra nor Mellieha as tourism zones.
More assistance from the MTA, staff training and proper preparation of accounting records were also highlighted as key recommendations in the report.



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