MARKET PULSE: September 2014

Malta is an archipelago comprising of seven islands in the central . It is located some 93 km south of Sicily across the Malta Hotel Supply Channel, east of Tunisia, and north of Libya in . Only the three largest islands – Malta, Gozo, and Comino – are inhabited. The resident population FIGURE 3: EXISTING SUPPLY 2012‐13 of Malta, which includes foreigners residing in Malta for at least a year, is Units 2012 2013 Share (2013) estimated at 416,000 as per the last census of 2011. 5‐star 15 15 8% 4‐star 42 44 22% 3‐star 42 55 28% Airport Statistics 2‐star 9 21 11% Tourist Villages / Guest houses 85 61 31% Malta International Airport is the only airport in Malta serving the entire Total 193 196 100% Maltese Archipelago. It is located between and Gudja and occupies Source: MTA Licensing Administration Office the location of the former RAF Luqa. The primary accommodation stock relates to holiday complex FIGURE 1: GROWTH IN FOREIGN TOURIST ARRIVALS, 2008‐13 (000S) establishments with a 31% of the total, while four‐star and five‐star hotels constitute 22% and 8%, respectevely.

4,500 4,000 Demand for Hotel Accommodation 3,500 Malta’s reliance on international source markets was the primary reason 3,000 for annual hotel arrivals to have recorded a compound annual growth rate 2,500 of about 9% from 2010 to 2013. Accommodated bednights have recorded 2,000 a compound annual growth rate of ost 8% over the same period. 1,500

1,000 FIGURE 4: DEMAND FOR TRANSIENT HOTEL ACCOMODATION 2010‐13 (000S) 500

0 2008 2009 2010 2011 2012 2013 14,000 12,618 12,890 11,703 Source: Malta International Airport 12,000 11,148

Annual tourist arrivals in Malta have recorded a healthy compound annual 10,000 growth rate of 7% over the 6‐year period from 2008 through 2013. 8,000

6,000 Source Markets 4,000 1,582 2,000 1,339 1,415 1,444

Visitors from the United Kingdom, Germany, and Italy accounted for more 0 than 60% of the total visitation to Malta for 2013. 2010 2011 2012 2013

Arrivals at all Licensed Establishments Accommodated Bednights

FIGURE 2: ARRIVALS BY SOURCE COUNTRY, 2013 Source: MTA Licensing Administration Office Outlook 6% 6% 29% Malta's tourism services industry has grown in recent years and it has avoided contagion from the European financial crisis, largely because its 27% debt is mostly held domestically and its banks have low exposure to the

18% sovereign debt of peripheral European countries. 14% As at July 2014, year‐to‐date tourist arrivals were up by 9% and year‐to‐ United Kingdom Italy Germany Other Europe ‐ EU Other Europe ‐ Non EU Other date bednights were up by 5%, compared to year‐to‐July 2013. Over the Source: Malta International Airport same period, tourism receipts were up 7% over the same period in 2013.

With superbly sunny weather, attractive beaches, a thriving nightlife, and UK is the dominant source market with a 29% of the total, followed by 7,000 years of intriguing history, Malta provides every reason in order to Italy and Germany with 18% and 14%, respectively. expect a continuously‐promising tourism future, while the cluster of existing hotels is anticipated to enhance the quality of the tourism product.

HVS is the world’s leading consulting and services organization focused on the hotel, mixed‐use, shared ownership, gaming, and leisure industries. Established in 1980, the company performs 4,500+ assignments each year for hotel and real estate owners, operators, and developers worldwide. HVS principals are regarded as the leading experts in their respective regions of the globe. Through a network of more than 30 offices and 450 professionals, HVS provides an unparalleled range of complementary services for the hospitality industry. www.hvs.com Note: The data presented in this article is for informational purposes only and is not meant as a basis for making investment decisions. For more information, contact the author Nikolas Pavlidis at [email protected]. Superior Results through Unrivalled Hospitality Intelligence. Everywhere. Published by HVS Athens | 5th floor 17 Posidonos Avenue GR‐17455 Alimos Athens Greece