‘Madness’: Tourism industry warnings ignored, more hotels in the pipeline

Repeated warnings from the tourism industry that more hotels on the islands will harm the tourism sector are being ignored by government, as research by The Shift reveals the Planning Authority is considering permits for at least 99 new hotels.

The applications are concentrated in Valletta, Sliema, St Julian’s and Gozo, areas that are popular with tourists. The Malta Tourism Authority continues to approve applications despite warnings from the Malta Hotel and Restaurants Association (MHRA) only last week.

The hotel industry is already struggling to fill beds at good rates, with the country mostly attracting low-budget tourists. MHRA President Tony Zahra described the situation as “complete madness” and urged the government to do something before it’s too late.

Zahra, a veteran in the field, did not mince his words when addressing industry stakeholders last week.

He said the Malta product was losing its shine, with problems of overcapacity now in full view. The country has been experiencing persistent problems with sewage, power cuts, claustrophobic traffic, noise pollution and packed beaches.

This situation, Zahra warned, was a recipe for disaster.

New hotels in the pipeline

Research conducted by The Shift on Planning Authority data, based on the response to a parliamentary question, shows that until the start of 2023, the Planning Authority was considering permits for 99 new hotels.

Sliema, St Julian’s and Gozo were the areas attracting the most interest, with 14 new hotels proposed in each locality.

This is followed by other locations such as Valletta (9 new projects), Gzira (5), Mellieħa (5), St Pauls’ Bay (7). New hotels are also being proposed in other areas.

Even the prime minister has entered the market with a new boutique hotel in Gozo.

€45 for a 4-star hotel room

MHRA President Tony Zahra said last week that four-star hotels were becoming so desperate they were selling rooms at just €45 per night in November.

He told hoteliers they needed to and act before it was too late.

According to a carrying capacity exercise by Deloitte in 2022, Malta needs to attract 4.7 million tourists by 2027, each staying under seven nights, to prevent oversupply.

Malta currently attracts around 3 million tourists annually, which already causes a significant strain on the country’s infrastructural resources.

A recent Malta Chamber report also indicates that, when accounting for inflation, tourists visiting Malta in 2023 spent less per capita than in 2019, further underscoring the need for sustainable growth.