The COVID-19 pandemic has presented the global hospitality industry with significant operational challenges, and Malta was no exception. In the face of this unprecedented scenario, the number of tourism inbounds on a local scale inevitably was close to zero in line with the restrictive measures in place, namely in March 2020.

More specifically, according to data gathered from the local National Statistics Office (NSO), the number of non-resident guests in Malta plummeted from 1.8m in 2019 to circa 0.5 in 2020, representing an overall drastic drop of 73.3%.

Additionally, in view of the restrictive measures adopted by the Government of Malta to contain the pandemic, hotels, and catering establishments were temporarily forced to shut down their respective operations, while travel-related restrictions inevitably halted tourism for extensive periods over the past months.

Faced with this unprecedented scenario, many catering and hospitality establishments implemented a series of cost mitigation procedures intended to drastically reduce their respective overall operating expenditure, principally adopting payroll saving measures across the board, being the largest single cost item of these types of businesses.

In this respect, despite benefitting from the Government wage supplement, many establishments opted to lay off staff to reduce their overall operating expenses. Consequently, many third-country nationals living in Malta at the time returned to their home countries or shifted to other sectors which were less impacted by the pandemic, namely construction and food delivery.

Unsurprisingly, the aforementioned pandemic-related developments also had a significant impact on the operations of International Hotel Investments p.l.c. (IHI). Given these challenges, the Group’s total revenue during 2020 decreased from €268.3million in 2019 to €91.9million in 2020, representing an overall decline of 65.7% on a comparative basis. This ultimately resulted in the Group reporting a negative EBITDA of €3.75million.

Nevertheless, IHI has shown resilience in these extraordinary times and started implementing strict measures aimed at lowering its overall operating expenses. For example, employees had to take cuts on their pay, temporary contracts were not extended and marketing costs, as well as capital expenditure, were significantly reduced.

Notably, IHI also benefitted from different Governmental support both locally and within other regions in which the Group operates. On a positive note, these measures were noticeable in their latest interim 2021 financial results, with EBITDA improving to negative €0.83 million, from a loss of €2.1 million reported in the previous corresponding period.

The disruption caused by the COVID-19 pandemic on the global hospitality industry remains ongoing, with the more contagious delta variants, continue to condition the pace of the industry’s recovery. More positively, all of the Group’s hotels are in operation, with IHI reporting higher occupancy rates in UK and Russia.

In line with an anticipated gradual recovery, and also since all of the Group’s hotels are currently in operation, IHI started to increase their headcount in parallel to the increasing occupancy rates.

Notwithstanding the implications brought about by the pandemic, the Group remains ambitious in moving forward with its projects. Development works are currently underway on hotel projects in Doha, Rome, New York, Bucharest, and Moscow, where the Group’s subsidiary companies are involved as development partners in these projects. IHI is also redeveloping the Grand Hotel Astoria in Brussels. In addition, in Malta, the Group submitted plans for building a new resort in a site formerly known as Hal Ferh.

In terms of forward-looking expectations, the Group anticipates an average occupancy rate of 40% for the whole year of 2021, with this expected to further increase to 70% in 2022, on the basis that no unforeseen circumstances will substantially impact the industry. In addition, IHI expects that 2022 will be a ‘bridge year’ and if herd immunity is achieved in the near term, globally, the industry might possibly fully recover back to pre-pandemic prior to 2024. Undoubtedly, the company is well-positioned to benefit from a recovery within its space, while the new projects which the company has embarked on augur well for its growth going forward.

This article was issued by Tamas Jozsa, a Research Analyst at Calamatta Cuschieri. For more information visit,? The information, view, and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice.