New hospitality rules ‘delegate policing to private citizens,’ warns Casa Rooms Director

“Property managers and landlords are not law enforcement entities.”

That is the central concern raised by Cecil McCarthy, Director of Casa Rooms, as Malta prepares to introduce new rules governing short-term rentals and tourism accommodation.

“We cannot support a policy framework that effectively delegates policing responsibilities to private citizens or management companies,” he tells MaltaCEOs, responding to proposals that would require landlords to display contact details and remain available to handle disturbances such as noise complaints.

For Mr McCarthy, the issue is not the intent behind the reform, but where responsibility ultimately lies. “The Government should focus on allocating adequate resources to the Police Force to effectively handle the inevitable increase in noise and nuisance reports, which should correlate directly with the year-over-year increase in tourism.”

His comments come as Malta moves to tighten standards across the tourism accommodation sector, signalling a broader shift from volume-driven growth to a more quality-focused model.

A newly proposed legal notice will require all short-term rental properties to install air conditioning, cap occupancy at two persons per bedroom, and introduce stricter compliance obligations for operators.

Tourism Minister Ian Borg framed the move as a necessary correction. “It’s no joke that some apartments are rented out to tourists without ACs, particularly in summer,” he said.

The reforms extend beyond short-term lets. Hotels will face a cap of 200 beds, height limit concessions will be removed, and new applications for one- and two-star hotels, as well as all-inclusive resorts, will no longer be accepted. Guesthouses and hostels will also face tighter planning and operational criteria.

While these measures reflect an effort to reposition Malta as a higher-value destination, Mr McCarthy argues that regulation alone will not deliver the intended results.

“The new legal notice is a step in the right direction, but what’s missing is enforcement,” he says.

“What we need to see is consistent inspections by the authorities, not only to verify that Airbnb properties have a valid license, but also to ensure they continue to meet the minimum requirements over time.”

He adds that this principle should apply across the board. “The same approach should apply to hotels: authorities should not issue a license and then stop monitoring. Instead, they should periodically audit short-term rental properties and hotels to confirm ongoing compliance with the minimum standards required by the authorities.”

This is not a new concern. When earlier reforms were proposed last November, Mr McCarthy had already warned that certain measures lacked the “teeth” needed to drive meaningful change.

Among them was a proposed three-month “cooling-off period” for landlords switching between long-term and short-term rental markets. While intended to stabilise housing supply, he argued it would be both economically burdensome and easily circumvented.

“Landlords could easily go around this measure by opting to pay the €200 fine associated with the late registration of LTR leases,” he said at the time.

Although that proposal did not make it into the latest legal notice, the underlying issue remains unchanged: enforcement.

Current proposals requiring landlords to display contact details may appear practical, but, according to Mr McCarthy, they risk placing unrealistic expectations on property managers while failing to address the root problem.

At a market level, however, he notes that some dynamics are already shifting.

Drawing on Casa Rooms’ portfolio of 300 properties across Malta and Gozo, he points to a gradual move back towards long-term rentals. “We are now observing a natural market correction between STR and LTR,” he explains, adding that declining returns for non-unique short-term properties are pushing owners to reconsider their strategies.

In this context, regulation may act more as a stabilising framework, provided it is backed by effective oversight.

The broader question now is whether Malta can bridge the gap between policy intent and practical enforcement. While the introduction of stricter standards signals a clear direction, their success may ultimately depend on consistent monitoring and institutional capacity.