In a reaction to the government announcement that the tariffs presented to the MCESD last Thursday will come into effect as from the 1st of October, the Malta Hotel and Restaurant Association has said that in the current market scenario any increase in costs on its members is going to be difficult to sustain.

As the MHRA has already stated throughout the past weeks, the international economic climate is far from encouraging and the industry was already bracing itself for a downturn in business levels due to reducing traveler numbers. The MHRA is in fact dedicating a great deal of resources to work with the MTA and the Ministry of Tourism so as to ensure that all possible is done to minimize the damage done by the developments in our international core markets.

In saying this, the MHRA said it does acknowledge that the effect on its members with the changes made from the initial proposals by government a few weeks ago, to the final proposals presented last Thursday is smaller. With the original proposals put forward by government, hotels would have faced an increase of 56% in their utility bills, an increase that would have put many hotels into a position where their operation was no longer sustainable.

Following the various meetings that took place and specifically the government’s reduction of €60 million from its original expectations, this impact has now been reduced to an average increase across the industry of 12% in the first year and a further 7% in each of the following two years. This reduction was achieved without placing any extra burden on other consumers. The MHRA also stressed that the higher rated larger properties would be paying up to 20% more on their bills while the smaller, lower rated properties would be making savings up to 20% in the first year. The MHRA stated that this may seem a little unfair for the larger properties to suffer substantial increase while the smaller properties make reasonable savings in the current market, but at least through its negotiations, MHRA has managed to convince Government to revise the rates downwards from those originally proposed. Over the next three years, if oil prices remain as they are, hotels will collectively pay over €5 million more for their electricity however this cost is going to be borne mainly by the larger hotels in the four and five star categories.

The MHRA concluded that now it is critically important for all concerned to focus on how the Island is going to deal with the international economic downturn. The downturn could effect us very negatively and we all have to work together to ensure that we minimize the effect it has on our economy, our jobs and our livelihoods. In order for this to happen there has to be a concerted effort to ensure we do everything possible as a nation to protect our futures. MHRA would once again like to urge the authorities to practice their much publicized consultation process with the nation’s stakeholders before such drastic measures are implemented in the future.