The financial implications of online bookings on the Maltese hospitality industry

Abstract

PURPOSE: This dissertation set out to discover the financial implications of online bookings on hotels in the local hospitality industry. In the process it also took a look at how modern technology has transformed the way in which various operations within hotels are nowadays run, discussing both the positive and the negative implications, while proposing how some of the negative implications of technology are being, and can be better, addressed. DESIGN: To achieve the objectives of this study, a qualitative approach was adopted. A thorough literature review was first carried out, and then an interview schedule was created to form the basis of interviews subsequently held with a number of managers in hotels in Malta to discuss the topic from a local perspective. In total, twelve semi-structed interviews were carried out with managers from twelve different hotels. FINDINGS: Over the years, technology and low-cost carriers have transformed the way most hotel bookings are made and how the industry operates. The result has been higher occupancy rates, higher room rates, and increased profitability and liquidity. CONCLUSIONS: Maltese hotels should now undertake investment to increase rooms stock and upgrade their product to start attracting more guests from the high-end market, especially from countries which have not yet been seriously tapped, while keeping in mind sustainable development. Competition in the region will increase in time, and so new feeder markets should be identified and pursued to decrease local hotels’ dependence on just a handful of countries. This can be achieved through the introduction of new routes, forming new contacts with foreign travel agents and marketing Malta itself more effectively. VALUE: This study emphasises the importance of the hospitality industry for Malta’s economy, and proposes measures and policies to help the industry evolve. This will help it to maintain and improve its position and competitiveness, especially in the Mediterranean region, in order to remain a main pillar of the Maltese economy.