The COVID-19 pandemic has dealt a significant and unexpected blow to a number of local businesses operating in the wholesale and distribution, retail, and hospitality and leisure sector - typically represented by Maltese family owned enterprises. Arguably the worst hit are restaurant, bars and hotel operators and retailers operating in the fashion industry. Whilst the range of Government support measures, including wage supplements and loan moratoria are lending a temporary lifeline, the longer-term impact of the pandemic has disrupted the unprecedented upward business trajectory which has been experienced in the past 4 years.
The local middle market is significantly dependent on inbound tourism which has been brought to a standstill during the last months. Businesses are eagerly awaiting to learn about the fate of the 2021 summer – which, for a number of operators could make or break the respective business.
Whilst internal demand has fuelled modestly business, the resumption of activity to pre-COVID scale rates is dependent on an efficient and effective roll out of the vaccine on the islands and also in EU partner states which, since a couple of months, used to source the larger number of tourist arrivals.
Despite the pressures emanating from such unprecedented business conditions, local business remain resilient. The number of middle market barometers run by PwC in the past months suggest a strong resolve to navigate through such unchartered territory through the re-consideration of business supply channels, the plunge into digital territory and the challenging of the cost base. Close monitoring of business performance has never been more relevant, and adaption of respective business models will be necessary if businesses are to survive this period.
Government support measures have been vital, and several businesses are keeping afloat in view of such support.
Several businesses are undergoing through major transformation projects with a view of consolidation their potential in anticipation for brighter business days.
Notwithstanding the economic turmoil the real estate industry, which has historically fuelled economic growth, remains resilient on the back of strong consumer confidence, evidenced by the rate of real-estate transactions experienced in the past months.
At PwC we can assist you to optimize the short- and longer-term strategies to enable your business to navigate through the turbulent times brought by the pandemic.
We can deploy and combine technical and industry expertise to assist the companies’ respective management team and boards to take stock of the situation and strategically position business resources in a shape that will maximise value.
Beyond the COVID pandemic, a number of other challenges loom on the horizon for the local middle market. The sector needs to start embracing the digitalisation of its operations whilst securing key talent, enhancing internal governance models, rationalising the cost base and internationalising business.
At PwC, we pride ourselves of the relationships we fostered with local successful businesses and the breath of experience such engagements have brought to our teams.
Senior Manager, Assurance, PwC Malta
Tel: +356 2564 7804
Manager, Advisory, PwC Malta
Tel: +356 2564 2590
Territory Senior Partner, PwC Malta
Tel: +356 2564 6892
Assurance Partner, PwC Malta
Tel: +356 2564 7194