Issue link: https://maltatoday.uberflip.com/i/1547510
MALTA'S hospitality indus- try has become increasingly dependent on foreign workers while continuing to offer some of the lowest wages in the econo- my, according to a new study by the Central Bank of Malta. The study, authored by Cen- tral Bank economist Eliza Far- rugia, finds that foreign na- tionals accounted for 58% of employment in accommoda- tion and food services in 2025, up from a much smaller share a decade earlier. At the same time, average hourly wages in the sector stood at just €8.90 in 2024, compared to €16.70 across the Euro Area. This makes Malta's hospitality sector one of the lowest-paying in the eurozone and the low- est-paying among Malta's ser- vice sectors. The findings point to an in- dustry characterised by heavy reliance on migrant labour, relatively short periods of em- ployment and a significant gap between workers' earnings and business profitability. Foreign workers now make up majority of workforce The number of foreign work- ers employed in accommoda- tion and food services increased from 3,013 in 2013 to 18,673 in 2025. Foreign nationals now ac- count for 58% of the sector's workforce, compared to 35% across the Maltese economy as a whole. The composition of this workforce has also changed. Between 2013 and 2019, EU nationals consistently outnum- bered workers from outside the EU. But from 2020 onwards, and particularly since 2022, the number of third-country na- tionals (TCNs) increased much more rapidly, making them the main drivers of foreign employ- ment growth in hospitality. The study also points to con- siderable differences in how long foreign workers remain in the sector. Foreign hospitality employees have a median length of stay of 2.3 years. But this figure masks a significant difference between EU and non-EU nationals. EU workers have a median stay of just one year, suggest- ing considerable turnover and a reliance on short-term em- ployment. By contrast, non-EU workers remain for close to three years, indicating a more sustained contribution to the sector's day-to-day operations. Lowest wages among service sectors Despite the industry's growing dependence on foreign labour, hospitality remains at the bot- tom of Malta's wage scale. Av- erage hourly wages, excluding taxes, stood at €8.90 in 2024, compared to the Euro Area av- erage of €16.70. Annual compensation per employee in the sector reached €17,200 in 2025, less than half the economy-wide average of €36,000. There has nevertheless been wage growth over the longer term. Annual compensation per employee increased by an aver- age of 5.2% between 2013 and 2025, with accommodation reg- istering average annual growth of 5.5% and food and beverage services 5.8%. However, the sector also ranks as Malta's second-least produc- tive in terms of real gross value added per person employed, with only construction record- ing lower productivity. This reflects the labour-inten- sive nature of hospitality, where services depend heavily on em- ployees rather than capital-in- tensive production. High profitability despite low wages The relatively low wages and productivity levels do not trans- late into equally low returns for business operators. According to the study, Eu- rostat data places Malta among the Euro Area countries with higher profitability in accom- modation and food services. Within Malta's econo- my, the sector recorded the fourth-highest profitability in 2025, measured by net operat- ing surplus as a share of gross value added. This was driven primarily by an expansion in profits in the accommodation sub-sector. The findings point to a strik- ing contrast: an industry that depends on a predominantly foreign workforce, pays its em- ployees less than half the Euro Area hourly average and ranks among the least productive sectors in Malta nevertheless generates comparatively high returns for its operators. 10 maltatoday | SUNDAY • 8 NOVEMBER 2026 NEWS Malta's hospitality sector one of the lowest paying in the eurozone, Central Bank study JAMES DEBONO jdebono@mediatoday.com.mt A Central Bank study finds that Malta's accommodation and food services sector pays less than half the Euro Area average, despite recording the fourth-highest profitability among Maltese economic sectors