Construction Boom Risks Making Malta Less Attractive To Luxury Tourists

Jo Caruana - 31st May 2019

“Things do need to be more organised and better planned” Sandro Chetcuti.

This article first appeared in the May edition of The Malta Business Observer

Travel industry leaders and contractors are at odds over Malta’s ability to attract luxury tourists, long term, with juxtaposing opinions about how sustainable the ongoing construction boom will turn out to be.

Reacting to a recent interview given by Malta Hotels and Restaurants Association President Tony Zahra, in which he claimed the island was failing to attract high spenders, Malta Business Bureau President and hotelier Simon De Cesare told the Malta Business Observer, he is greatly concerned about the impression we are giving to tourists across Malta.

“This economic boom is indeed resulting in more and more construction and investment. However, this is not a short-term problem. It is quite the opposite in fact, as large-scale projects that are being proposed at the moment will be completed in five years or more, so I don’t see a situation in which this level of construction will abate any time soon,” Mr De Cesare said. However, in contrast to the MHRA president, he doesn’t believe that this, for the time being, will “detract higher-end tourists from coming here,” though he said, “it will certainly limit the chances that they might return.”

Despite this, he noted, he was “ever surprised by the compliments that I receive from tourists to our hotels. They still see some of the charm we, Maltese, feel we have lost. Nevertheless, I don’t believe it is sustainable. Just from a tourism perspective, I believe the number of hotel beds available in the next two-to-three years will double, due to new developments. Do we really think that we can afford to double the number of tourists coming here? I don’t,” he underlined.

Instead, what will end up happening, he said, is that tourism figures “will squeeze rates and occupancy down, and businesses will reduce profitability and close.” The problem is being exacerbated by “the massive number” of apartments on online channels, such as Airbnb, and this will also, in the future “lead to difficulties” for people who have purchased at high rates and are living off the proceeds. “I think this will, unfortunately, be a turning point for the economy – it’s not going to be pretty, and sadly what has been developed now cannot be undeveloped,” he asserted.

One the flip side of that, though, Sandro Chetcuti – President of the Malta Developers’ Association – said that it is also the hotels themselves that are causing much of the construction at the moment. That said, he hopes development will begin to be better regulated and highlights the recent launch of the new scheme for ‘considerate’ developers, which incentivises developers and contractors to work in a more conscientious way.

“This new scheme requires contractors to go beyond their call of duty – and those that do will benefit from it,” he said. “Overseas, construction sites are barely visible, they contain their dust and they stay on top of any noise pollution. We agree that, with all the road works and the construction ongoing, things do need to be more organised and better planned.”

In fact, Mr Chetcuti sees better planning – and specifically better forward planning – as key to better results. “If we plan properly, we will achieve better results, but it will take effort and the contractors need to play a huge part in that,” he stressed.

Mr De Cesare was very much in agreement that planning has a crucial role to play in the sustainable future of how construction and the tourism industry can work together. “If we don’t adopt a planning-centric mentality right now, as a country, then we will never achieve a good final product and it will soon be too late,” he stressed.

“For example, the Planning Authority should be planning and not solely regulating. Tourism associations should be analysing and pushing for the type of accommodation that the country needs 10 years into the future. It was great to have seen a master plan proposed for Paceville and St Julian’s; though there were shortcomings in the delivery and some of the crucial suggestions stopped short,” he continued.

Furthermore, while he believed it was heartening to hear recent Government initiatives aimed at increasing open space for the Maltese to enjoy, Mr De Cesare said he was not upbeat about the outlook of what we will leave behind for future generations in Malta.

“Yes, we are becoming more cosmopolitan and we will need to build higher and might need to reclaim land in certain scenarios. However, we are already almost at bursting point. I cannot imagine how much more populated and developed we can become. There is a serious cost in quality of life to becoming more cosmopolitan, and we need to think about it very seriously,” he concluded.

Meanwhile, Malta Chamber of Commerce president Perit David Xuereb explained that the Chamber has always advocated a sustainable approach to all economic sector growth, in such a way that one sector must not develop and flourish to the detriment of another.

“As the economy grows – and with it the number of people who live and work in Malta – it is only natural that pressure for new accommodation and infrastructure increases,” he said. “Within this context, however, we urge the authorities to be mindful of the sustainability of such a growth in development. Every infrastructural project, big or small, must take place in full respect to the very best practices of work, in such a way that the nuisance to its surroundings are minimised,” he explained.

He decried the situation “wherein one can spot upward of 15 tower cranes from any vantage point in Malta,” saying that though it may imply a vibrant and very active economy, it “may also send the unwanted message of disruption and disturbance to any – especially high-end – destination leisure or business travellers.”

Moreover, he emphasised that a high standard of living should accompany development and, in this regard, referenced the Malta Chamber’s recent recommendation for Government authorities such as the Planning Authority to “take on a more proactive role and guide the development sector in terms of what is really needed for the sustainable growth of the country.”

From Mr Chetcuti’s perspective, he now believes the future of the marriage between development and touristic appeal will depend very much on the ‘feel good factor’ and the demand for better quality.

“We need to understand all the stakeholders,” he noted. “A strong economy can help us look after the environment and invest in better planning. If the investors stop investing, then everyone will have a problem as, without financial back-up, we cannot move forward. We need to marry the two – the environment and construction – and work together. That is something I have been saying for the last 10 years: we need advice from planners, from people who are knowledgeable about air quality, and people who appreciate nature. Everything has to work in synergy,” he claimed.

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