Hotel Performance Survey by Deloitte Malta

Malta's hospitality sector delivered impressive growth in 2025 - 4 million+ tourists, €3.9 billion in tourism spend, and 12.8% year-on-year growth in arrivals. But the deeper story reveals a market in transition.

David Delicata, Transportation, Hospitality, and Services (THS) leader at Deloitte presented the Hotel Performance Survey Q4 and full year 2025 results at an event organised by the Malta Hotels and Restaurants Association (MHRA). He said that while total tourism spend grew by 18.6% year on year, average spend per tourist increased just 5.1%. This is symptomatic of  the 'value' challenge in the sector: the country is winning on attracting volumes but losing on visitor yield.

5-star

In Q4, 5-star hotels managed to attract volumes but lost on yield. Operators faced emerging pressure with average rates declining by 2.8% in Q4 (first decline since 2022), and payroll costs per available room surged 9%—outpacing revenue growth resulting in a drop in GOP margins during the last quarter of 2025. However, it must be noted that the stronger quarters, earlier in 2025, made up for this drop with 5-star operators still reporting higher rates, occupancy and revenue for full year 2025 when compared to 2024. It must be further noted that increased costs, especially payroll costs, are having a lasting impact on the gross operating profit margins, with operators reporting a 0.4PP increase over 2024.  

4-star

Q4 2025 results for the 4-star hotels were positive in spite the drop in occupancy of 3.8PP compared to Q4 2024. Average rates and revenue increases of 9.2% and 3% respectively resulted in higher GOP of 2.4PP. This was coupled by a containment and reduction of total costs (-0.6% compared to Q4 2024). This indicate that 4-star operators adopted a higher value pricing approach, in which they maintained or increased their average rates while manging costs better and foregoing higher volumes in terms of guests during the quarter. Full year 2025 results saw average daily rates up by 4.8%, occupancy increase by  2.1PP, and GOP margins expanded  by 2.4PP to 41.7%. This result was notwithstanding the increase in costs of 3.4%.

Forward outlook is optimistic

Looking ahead, Q1 and Q2 2026 bookings look encouraging, and over 50% of hotels expect higher rates compared to 2025.

The sector faces three critical challenges: guest yield maximisation, cost inflation (especially labour costs), and market divergence in terms of pricing strategies. Volume growth alone is insufficient. The path forward requires revenue diversification, operational efficiency, and premium positioning. The 4-star segment's success in the last quarter in terms of balanced pricing, moderate occupancy and disciplined cost management offers a blueprint. For 5-star properties, strategic repositioning is essential.

The question for 2026 isn't whether Malta can attract more tourists. It's whether hotels and the country in general can attract the right guests, at the right price, with the right experience and offering, while managing costs effectively.

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About the Hotel Performance Survey

Making informed decisions is key to the effective management of all business organisations. With close to 20 years’ experience in analysing performance, costs, trends and general market information of the tourism industry, Deloitte Malta is well established to provide advisory services and business solutions to operators in this sector.

The report highlights key performance indicators for various hotel categories including:

• Hotel occupancy levels
• Average daily room rates (ADR)
• Total revenue per available room (RevPAR)
• Operating costs
• Staff costs
• Industry outlook

Copies of the survey report are sent to all participating hotels free of charge. Copies are also distributed within the sponsoring banks and to key organisations within the tourism industry.

Please contact us should you have any queries.