Analysing some of the Maltese Economy’s Key Insights from a Short Let Property Management Company’s point of view
As a Short Let Property Management Company operating in Malta, it’s crucial to analyse some of the leading indicators of the Maltese economy. This article examines the data on inbound tourism and residential building permits from 2022 to 2023, providing valuable insights for landlords, owners, and property managers in the short let holiday rental market. By analysing such data, property management companies can optimize their pricing strategies and maximize their revenue.
Inbound Tourism in Malta
The National Statistics Office (NSO) provides data that allows us to compare inbound tourism in Malta between 2022 and 2023. Let’s delve into the key findings to understand the trends in tourist arrivals, nights spent, and tourism expenditure during such periods.
The data reveals significant changes in inbound tourism between 2022 and 2023. In December 2022, approximately 136,423 inbound tourists visited Malta, resulting in 967,108 nights spent and expenditure exceeding €101.5 million. By March 2023, the number of inbound tourists increased to 174,382 with total nights spent reaching 1,057,589 and total expenditure surpassing €126.3 million. April 2023 witnessed a further increase, with 266,798 inbound tourists, indicating growth compared to the corresponding month in 2022.
During the first quarter of 2023, a total of 443,062 inbound tourists visited Malta, and the nights spent surpassed 2.9 million. The estimated expenditure for this period amounted to €312.4 million.
Malta’s Residential Building Permits
Examining the residential building permits data allows us to analyse the trends in the construction industry between 2022 and 2023. In the first quarter of 2022, 609 building permits were approved for a total of 3,203 new dwellings, signifying a significant 59.6% increase compared to the same quarter of the previous year. Apartments accounted for 71.3% of the approved new dwellings.
In Q4 2022, there were 357 building permits approved for a total of 2,064 new dwellings, representing a 33.2% increase compared to the same quarter of the previous year. Apartments constituted 68.7% of the total number of approved new dwellings.
However, in Q1 2023, there was a 20.7% decrease in the number of approved new dwellings compared to the previous year’s first quarter. Dwellings approved in Malta and Gozo and Comino decreased by 18.9% and 29.0% respectively. Despite this decline, apartments still accounted for 71.6% of the total number of approved new dwellings.
Implications for Short Let Property Management Companies
As the Maltese real estate market grows, Short Let Property Management Companies play a vital role in the holiday rental market. By monitoring both inbound tourism data and residential building permits, property managers can understand how much the market is being saturated. By tracking inbound tourism, they can assess the demand for holiday accommodations, by identify peak periods, adjusting pricing and continuously applying marketing strategies on all OTAs during the entire year using a pricing software as explained in our other article found here.
Similarly, monitoring the number of approved new dwellings helps the stakeholders understand the supply of rental properties placed on the market for short lets. A higher number of building permits suggests potential opportunities for expanding property portfolios and meeting the growing demand for holiday rentals. Conversely, a decrease in building permits may indicate a limited supply of rental properties, potentially leading to increased demand and rental prices being weather for short lets or long term rentals in Malta.
Comparison and Conclusion
The analysis of inbound tourism and residential building permits data in Malta presents a mix of implications for the holiday rental and short let industry. The growth in inbound tourism during the first four months of 2023, along with increased tourist numbers, nights spent, and total expenditure, indicates a positive trend for the remaining of the year. This signifies a growing customer base and potential opportunities for Short Let Property Management Companies, landlords, and owners of holiday rental apartments.
However, the decline in the number of approved new dwellings in Q1 2023 may have a further impact on the nightly rates. The start of a decrease in building permits, particularly in Malta and Gozo, suggests a potential slowdown in the construction industry. This could initiate a process of limiting the availability of short let rental accommodations in the Maltese real estate market, potentially leading to an increase in the nightly rates as the supply of accommodations becomes more limited.
In conclusion, since the inbound tourism in Malta is still yet to reach the levels of 2019, it is essential for Short Let Property Management Companies to closely monitor these trends. By making informed decisions about investments, pricing strategies, and marketing efforts, they can adapt to the change in the market dynamics and thrive in an environment with a restricted supply of rental properties, ensuring that their landlords and owners consistently achieve optimal revenue generation.
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