PwC Malta’s Market Barometer has recently placed a spotlight on the local restaurant business, which has long established itself within Malta’s hospitality industry. Over 100 restaurateurs participated in this market exercise, which was carried out during the last quarter of 2018
PwC Territory Senior Partner, David Valenzia, commenting on the results stated that the sentiment emanating from the barometer corresponds to an economic landscape that has experienced an increase in disposable income and a marked growth in population, that has also brought with it the challenges in terms of resources and infrastructure. The evolving channels of customer interaction and demands is a further challenge that the industry needs to adapt to, and invest in.
The overall business feeling as expressed by the participants in the barometer is cautiously optimistic – where 48% state that an increase in business was experienced when compared to 2017, in contrast to 23% who registered a decrease in business and 29% who report stable commercial levels. . Restaurants in the St Julian’s area reported a 76% increase in business, with restaurants in the southern area of the Malta, similarly appear to have experienced a positive level of business with a 63% increase. In contrast, only 25% of restaurants in the central area of Malta report an increase in business.
In what arguably is a cautionary signal coming out from the barometer, the industry is expressing an outlook, which, when compared to 2016 barometer, is not as optimistic. Where, in 2018, 51% of the respondents report a favourable outlook for the next 6 months, and 16% hold a negative outlook, in 2016, 71% of the industry expressed a favourable outlook, and 18% a negative respectively.
"The sentiment emanating from the barometer corresponds to an economic landscape that has experienced an increase in disposable income and a marked growth in population, that has also brought with it the challenges in terms of resources and infrastructure. The evolving channels of customer interaction and demands is a further challenge that the industry needs to adapt to, and invest in."
The top-most business concerns are generally consistent with the results of the 2016 barometer, albeit varying in the extent. The local hospitality industry continues to demand an adequate supply of skilled resources. The results of the 2018 barometer confirms the pertinence of this issue, where 35% of the respondents identified the availability of skilled resources as their top most business concern. The higher incidence of low-spending tourists and inflation and utility costs ranked second and third respectively as business concerns. In 2016, a significant 63% of the industry had identified human resources as the major business concern. The results of the current barometer suggest that the industry has, over the last 24 months, remedied this issue through the engagement of foreign nationals.
When questioned further about which are the most effective initiatives, which ought to be adopted to address the current challenges in human resources, 38% stated that the industry needs to come together and increase the financial package to its employees, with a view of making a career in hospitality more enticing. A further 37% are of the opinion that policy makers and educational and vocational institutions ought to position employment in the hospitality industry as more attractive job opportunity. Only 25% of the respondents think that the sole strategy of recruitment of foreign nationals should be pursued.
The question of the extent of the investment in local infrastructure was also discussed. 53% of the operators in the industry are of the opinion that the level of investment in not commensurate to the recent surge in tourists volumes. This sentiment, at 88%, is more acute through restauranteurs who operate in the south of Malta.
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Territory Senior Partner, PwC Malta
Tel: +356 2564 6892
Senior Manager, Marketing & Communications, PwC Malta
Tel: +356 2564 6734