Mdina’s 17th-Century Palazzo Costanzo Set for Luxury Hotel Makeover—Heritage vs Tourism Battle Begins

A 17th-century palazzo that once hosted Grand Masters and Maltese nobility could become Mdina’s next five-star hideaway, according to plans filed with the Planning Authority last week. The proposal, submitted by a consortium led by boutique-hotel specialist Corinthia, seeks to convert Palazzo Costanzo on Villegaignon Street into a 30-suite “ultra-luxury” property with rooftop infinity pool, subterranean spa and a Michelin-targeted restaurant carved into the bastion walls.

For the Silent City—where permanent residents now number fewer than 250—the project is both a lifeline and a lightning rod. “We’re caught between survival and soul,” says 68-year-old Marisa Falzon, whose family has lived inside the medieval walls since the 1890s. “Tourism keeps the lamps on, but if the lamps become too bright, Mdina stops being Mdina.”

Local context matters. Mdina lost its capital status to Valletta in 1571, yet its honey-stone palazzi and narrow, car-less lanes still draw 750,000 day-trippers annually—more than Malta’s entire population. Overnight visitors, however, are scarce: the city currently offers only 22 legal guest beds, all inside converted townhouses. The new hotel would quadruple that figure and, developers argue, nudge high-spenders to linger after the coach coaches roll out.

“Mdina has been a daytime museum for too long,” says architect Edward Said, non-executive director on the project. “By activating the upper floors after 6 p.m. we extend the economic day for restaurateurs, artisans and custodians.” His renderings show discreet bronze signage, no branding on façades, and a pledge to keep the palazzo’s baroque doorway—where Napoleon allegedly knocked in 1798—open as a “cultural lobby” accessible to the public.

Still, heritage watchdogs are wary. Palazzo Costanzo is Grade 1 scheduled, its interiors bristling with 18th-century frescoes by the Favray school and a unique trompe-l’œil ceiling depicting the 1429 Siege of Malta. “Once you drive service ducts through those walls for mood lighting and en-suite bathrooms, the integrity is gone,” warns architect and NGO head Maria Grazia Cassar. A petition she launched on Thursday has already gathered 4,200 signatures, demanding a full Environmental Impact Assessment and questioning whether Mdina’s fragile infrastructure—sewerage laid in 1922, single-lane access via Greeks Gate—can handle laundry trucks, spa deliveries and 60 extra employees shuttling in daily.

Economics are equally delicate. Mdina’s restaurants make 70% of turnover between March and October; outside those months, shutters clatter down like clockwork. Mayor Peter dei Conti Sant Manduca, himself descended from the palazzo’s original owners, welcomes “sympathetic investment” but insists on a resident parking scheme and caps on delivery times. “We want nighttime footfall, not nighttime noise,” he tells Hot Malta.

Tourism Minister Clayton Bartolo has so far remained neutral, noting only that “high-value, low-impact tourism aligns with Malta’s post-COVID strategy.” Yet government sources confirm the project enjoys “in-principle Cabinet goodwill,” especially after cruise-ship passenger numbers crashed 38% last year.

Inside the palazzo’s dusty courtyard, where citrus trees still drop oranges onto worn limestone, the debate feels both academic and immediate. “My grandchildren only know Mdina as a film set for Game of Thrones,” sighs Falzon, gesturing at the marble plaque commemorating the 1837 cholera quarantine once housed here. “If a hotel means they can afford to stay, maybe that’s the price of memory.”

The Planning Authority is expected to schedule a public hearing in September. Until then, Mdina’s cats will continue to outnumber its nighttime residents, and the lanterns along Triq Villegaignon will flicker over walls that have witnessed Romans, Arabs, knights and Britons—all of them, in their own way, developers of this stubborn, luminous city.

Conclusion: Whether Palazzo Costanzo becomes a sanctuary for affluent travellers or a rallying point for heritage defenders, its fate will signal how Malta balances the ledger of profit and patrimony. In a country where every stone tells a story, the next chapter is still being written—one fresco, one suite, one silent dusk at a time.