Maltese tourism after COVID: who won and who lost

Malta’s tourism economy went off a cliff in 2020

The numbers are stark. In 2019, Malta received 2.8 million tourists — a record, and roughly five times the island’s own population. In 2020, by the end of November, that figure had fallen to somewhere around 570,000. The MTA’s own projections had expected more than 3 million. The actual number was 20% of that.

For an island whose economy is heavily tourism-dependent — the sector accounts for roughly 27% of GDP in an average year — this was not a correction. It was a discontinuity.

By December 2020, you could see the effects clearly on the ground. This is an attempt to take an honest look at who was absorbing the damage, who had found workarounds, and what the longer-term shape of Malta’s tourism might look like on the other side of the pandemic.

Who absorbed the most damage

Hotels in Sliema and St Julian’s took the worst of it. These are the properties built for volume — convention-scale capacity, tour operator contracts, cruise-adjacent positioning. When international air travel stopped, these hotels had no domestic market to fall back on. Malta’s own population is half a million people. Even if every Maltese citizen had decided to holiday domestically in 2020, it wouldn’t have filled those rooms.

The higher-end boutique hotels in Valletta had slightly more resilience. Several pivoted toward local residents looking for a “staycation” in the capital. Valletta has a relatively small residential population (around 6,000 people) but strong social connections with the broader island; a weekend in a Valletta boutique hotel became, for a brief period, a thing some Maltese actually did.

GYG tour operators — the boat trips from Sliema, the walking tours of Valletta, the jeep safaris in Gozo — essentially stopped operating between March and June. When Malta opened to EU tourists in July 2020, some came back, but at radically reduced volumes. A three-islands boat trip from Sliema that would have carried 60 people in August 2019 was carrying 15 in August 2020.

The Marsaxlokk fish market, which draws around 1,000 visitors on a normal Sunday morning, was reported by several vendors to be operating at about 15% of normal volume in the autumn of 2020. The fish stalls remained. The tourist-facing gift stalls largely did not open.

Who found workarounds

Gozo had a relatively better 2020, for a counterintuitive reason: Maltese residents themselves started visiting Gozo more. Domestic tourism within the Maltese islands — Maltese people taking a week in Gozo rather than flying to Barcelona — was a real phenomenon in 2020. It didn’t compensate for the absence of international visitors, but it meant Gozo’s restaurants and accommodation had some trade when the big hotels were ghost buildings.

Self-catering accommodation performed better than hotels. Farmbouses in Gozo, apartments in Sliema and St Julian’s, Valletta townhouse conversions — these properties had the advantage of feeling isolated and private in a way that large hotels did not. People who were willing to travel internationally at all in 2020 tended toward this type of accommodation.

Digital-native businesses — the remote workers who had started arriving in Malta before COVID, drawn by EU residency options and the Nomad Visa program — were unaffected. Malta’s digital nomad population continued to live and spend on the island. This was a small but visible group in Valletta’s coffee shops, and they spent money in the economy in a way that partially offset tourist spending.

Dive operators had a better summer than expected. Diving is an inherently small-group activity that was not the kind of crowded experience people were avoiding. The dive sites at Mellieha and St Paul’s Bay operated through the second half of 2020 with reduced but consistent business.

The structural changes that emerged

The cruise market took a direct hit and the effects persisted. In a normal year, Malta receives around 750,000 cruise passengers — day visitors who arrive at the Grand Harbour, spend four to six hours in Valletta, and leave without spending a night. In 2020 this essentially stopped. For the tourist-facing businesses around the Valletta waterfront, this was a specific and concentrated loss.

The more interesting question is whether the absence of cruise passengers changed how Valletta felt to the staying travellers. Many long-term Malta observers think it did — that the city became easier to walk and quieter in ways that regular visitors noticed positively. Whether this changes anything about how Malta manages its cruise arrivals longer term is, as of December 2020, an open question.

Airbnb supply adjusted slowly. Malta had a significant Airbnb market before COVID — around 3,000 active listings, many of them conversions from long-term residential rental stock. Landlords who had pulled properties off the long-term rental market to put them on Airbnb found themselves with unbooked properties. Some returned to long-term rentals, which had the knock-on effect of marginally increasing housing availability for Maltese residents — a dynamic that the Maltese media covered at length.

What might change permanently

Some of these changes will reverse. When international travel fully normalises, the hotels will fill, the boat tours will run, the fish market on Sunday morning will be crowded again. Malta’s location and its combination of easy climate, English language, and EU membership make it durable as a tourism destination.

But a few things might shift:

The budget tourist mix might contract. Before COVID, Malta had been increasingly popular as a destination for hen parties, cheap stag weekends, and “party island” segments — particularly Paceville and the St Julian’s hotel strip. This segment depends on very cheap air travel and very cheap accommodation. If the economics of either change, Malta’s appeal to this segment changes with them.

The quality-versus-quantity debate inside Malta might sharpen. The MTA and the Maltese government had been debating for several years whether the island’s carrying capacity was being exceeded. COVID provided an involuntary experiment in what lower-volume tourism looks like. Not everyone disliked the result.

Remote worker infrastructure might stick. Malta’s Nomad Residence Permit program, launched in 2021, is a formal response to a trend that was already visible in 2020: people who worked online choosing to live in Malta for months at a time. This is a different kind of visitor than a week-long tourist, and their needs (longer-stay accommodation, co-working spaces, consistent internet, supermarkets) are somewhat different.

The December 2020 view from Valletta

Walking through Valletta in December 2020 was an unusual experience. The streets were not empty — Valletta has a residential population, and the Christmas decorations were up — but the particular layering of tourists on locals that characterises the city in summer was absent. You could walk up Republic Street without slowing down. You could get a table at a restaurant without waiting.

What became visible in that absence was the city itself — the architecture, the scale of the baroque streets, the quality of light in early winter on limestone. Some of us thought: this is a very good city that spends half the year obscured by the crowds it needs to survive.

The balance between those two things — what Malta is, and what it needs to be — is the question that 2021 and beyond will have to answer.