President – MHRA
Added: 17 September 2022
COVID will probably go down in history as one of the bigger game changers for a long time, probably with the hospitality industry as one of the worst hit industries. COVID practically shut down the hospitality industry as whole countries were quarantined. The industry went into full survival mood and it’s probably thanks, in a large part, to the government support that most – if not all – of the industry made it through the pandemic.
The greatest challenge coming out of the pandemic was seen in the Human Resources departments. While trying to make ends meet in the most sustainable way, during the pandemic the hospitality industry was forced to resort to a cut in its headcount – sometimes to the barest minimum.
Coming out of the pandemic the demand for hospitality showed a very strong upward trend and everyone in the industry was scrambling to bring up their employee numbers to cope with this uptake. This has proven to be very difficult and all the stakeholders in the Tourism Industry including airlines, airports as well as restaurants, hotels and such supporting businesses of the sector, are scrambling to find staff. It’s proving very difficult to hire staff for a multiple of reasons and it will take many months before the situation will come back to normal.
The pandemic lasted two years – much much longer than anyone imagined when it started affecting Malta in March 2020. We started coming out of the pandemic in April of this year and it will take probably till 2023 or 2024 for the connectivity to come up to 2019 levels – which was a record year.
Connectivity is the key to success and we need that to return to the 2019 levels.
Inflation was expected to happen post the pandemic, since all governments printed money to keep the economies afloat. What has been a surprise was the start of the Ukraine War and this has hit the cost of food and energy in a dramatic fashion.
We have been fortunate, up to now, in so far as the price of energy has not increased in Malta and this has, to a certain extent, helped in keeping our energy stable in the form of costs, of course.
However everything else seems to have gone up. It is now time for our managers to look at every single Euro of expenditure and see how they can save at least 8 percent of the costs so that the increase of inflation which is running at just below 8 percent can be offset through savings.
Of course this is much easier said than done, however this exercise is unavoidable – otherwise the industry’s costs will shoot through the roof and I doubt our clients are willing to pay for the increased costs due to inflation.
Firstly, always plan for the possibility of some unknown ‘unknown’ hitting you – make sure that the projects that one is going to start are properly financed through own capital and leveraged at a sustainable rate.
One cannot rely on government handouts to keep oneself afloat. Secondly it’s the importance of having the core of your staff who are Maltese or Maltese residents to ensure that you are in a position to continue operations even when the going gets tough.
There are many ways to improve but firstly we must all understand that we are in the business of hospitality and that our job is to see that clients are enjoying themselves when they are in one of our establishments. Consequently we must provide hospitality with a smile and treat our guests as if they are royalty.
The MHRA has been at the forefront in providing training during the pandemic and continues to do so throughout the year. Training is something which never ends and we provide full support to our members with training of staff both virtually and physically.