21 new hotels approved in two years despite oversupply

Under Minister Clayton Bartolo’s political remit, the Malta Tourism Authority (MTA) has continued to issue licences for new hotels even though the government and the private sector agree that there is no need for any more.

Following a request by PN tourism spokesman Mario De Marco, new data supplied in Parliament shows that 21 new hotels were approved in 2022 and 2023, with a combined capacity of 2,256 beds.

However, according to Bartolo, not all were approved.  Aside from the 21 approvals, three were declined, and some 20 are still pending.

The government’s continued interest in approving new hotels contradicts what was declared by Finance Minister Clyde Caruana on several occasions and repeatedly by industry bodies over the last few years.

In 2021, the Malta Chamber of Commerce, Enterprise and Industry called for a moratorium on issuing licences for new hotels as the island was already oversupplied. The same position was expressed by the Malta Hotels and Restaurants Association and backed by Caruana, who said Malta does not need more hotels and called for a change in direction.

As recently as April 2023, the minister told the Times of Malta that the current number of hotels can already sleep enough people to cater for an increase in tourists, and Malta does not need to build more.

Scientific data also backs the oversupply of hotel beds.

According to a carrying capacity exercise by Deloitte, Malta will need to attract 4.7 million tourists by 2027, each staying under seven nights, to prevent oversupply.

In a matching exercise, the Malta Chamber found that based on a ‘best case scenario’ projection of 3.2 million tourist arrivals by 2030, this would result in 22.4 million guest nights, or 14.1 million short of the projected capacity (by 2021).

The latter did not consider the further increase in bed capacity because of more licence approvals.

Currently, Malta attracts less than 2.5 million tourists a year, which has a massive impact on the country’s infrastructural resources. A recent Malta Chamber report also shows that, when considering inflation costs, tourists visiting Malta in 2023 spent less per capita than they spent in 2019.