The Malta Hotel and Restaurant Association have released the BOV MHRA Hotel Survey by Deloitte for the second quarter of the year. MHRA President, Mr Kevin De Cesare, reported that the tourism industry continued to perform reasonably well in the second quarter of the year and registered further gains over the results of 2007. Tourist arrivals were up by 11.4% for the quarter and 15% up on a year-to-date basis. Albeit at a slower pace than the increase in arrivals, the number of guest nights generated in Q2 continued to increase by 4.7% bringing the year-to-date increase up

The commendable increases in both arrivals and guest-nights generated have ranked the first six months of 2008 amongst the strongest winter/shoulder seasons in the past 6 years. These results were achieved against a backdrop of turbulent international conditions in the global tourism industry and clearly do justice to Government's commitment to continue to increase the level of expenditure on tourism and to continue to support the development of increased capacity and new routes to Malta.

The increase in tourist arrivals and guest-nights contributed to higher occupancy levels being achieved in both the 4-star and 3-star categories. However, the increased volume registered in the 5-star category was less than the significant 21.3% increase in bedstock availability and resulted in a drop in average occupancy for this class.

Notwithstanding a 1.6% drop in total tourist expenditure for the quarter the Average Achieved Room Rates continued to improve in all three categories:

The higher occupancy levels and achieved room rates registered by both the 3-star and 4-star hotels led to improved profitability levels being achieved. However, the lower occupancy levels in the 5-star category gave rise to a decline in the average achieved Gross Operating Profit for this category.

Notwithstanding the positive results, Mr De Cesare was quick to stress that it is very important that stakeholders do not dwell solely on the positive aspects of the 'headline results' without giving equal prominence to the following negative trends identified by MHRA and which should be a cause of concern to all stakeholders:

? Increasingly turbulent international markets which are resulting in lower occupancy levels in other competing European destinations;

? An evident slow down in the rate of growth in tourist arrivals and guest-nights as compared to previous periods;

? The continually shorter average length of stay which necessitates an even greater increase in tourist arrivals to maintain guest-night generation growth;

? The apparently lower occupancy rates reported by most hotel categories for the key month of August; and

? The increasingly negative sentiment and predictions for the winter months that lie ahead.

Mr De Cesare stressed the importance of Government taking heed of the 'writing on the wall' and of committing increased resources to marketing activities and supporting further initiatives to increase flight capacity to our islands.

The BOV MHRA Hotel Survey by Deloitte is an industry initiative sponsored by Bank of Valletta p.l.c. and is open to all hotels in Malta and Gozo, not just MHRA members. It is compiled independently by Deloitte and is the only survey to analyse trends in detail all the way from income to operating profit. Fifty-two properties participated in this edition. This survey edition covers 9,043 rooms (2007 Q2: 9,015) and Euro 69.8 million in revenue (2007 Q2: Euro 62.0 million). The next survey will cover Q3 of 2008. Hotels which wish to receive a full copy of the survey report and are prepared to start participating in future hotel surveys are invited to send an email to mhrasurvey@deloitte.com.mt.