Catering Association Calls Budget 'Bittersweet' for Hospitality Sector

The Malta Catering Association has described the 2027 national budget as 'bittersweet' for the hospitality sector, pointing to a mix of supportive measures and missed opportunities.

The association acknowledged some positive steps, including continued energy subsidies and a reduction in utility costs for businesses. These measures help operators manage rising operational expenses in a sector already squeezed by inflation.

However, the association flagged that the budget fell short on targeted relief for restaurants and catering establishments. No specific tax breaks or social security contributions reductions were announced for hospitality workers, a key request from the industry.

Labour shortages remain a critical issue. The association noted that without more attractive incentives to retain and recruit staff, businesses will continue to struggle with high turnover and recruitment costs.

The budget also did not address the VAT burden on food and beverage services, which the association argues puts Maltese operators at a disadvantage compared to other EU destinations. This affects competitiveness, particularly for tourism-facing businesses.

On the positive side, the association welcomed the extension of the reduced VAT rate on electric vehicles and investment in tourism infrastructure. These measures support long-term sustainability and the sector's green transition.

For Malta's business community, the message is clear: while the budget provides some relief, the catering sector needs more structural support to remain viable. The association has called for continued dialogue with the government ahead of the next financial year.

The 'bittersweet' verdict reflects a sector caught between short-term cost pressures and the need for long-term policy reform. Operators will be watching closely for follow-through on promised consultations.