Ministry of Tourism, Wildlife and Culture says the Covid-19 pandemic will cut tourism sector earnings by 60 percent, potentially diminishing its contribution to the country’s gross domestic product (GDP).
Malawi’s GDP stands at $8.5 billion (about K6.3 trillion) and this means that the 60 percent loss is equivalent to $357 million (about K268 billion).
In an interview on Saturday on the sidelines of the handover of Chintheche Inn from Central Africa Wilderness Safaris to Sunbird Tourism plc, Secretary for Tourism Isaac Katopola said the global pandemic has hit the industry hard.
He said many hotels have occupancy rate of less than 10 percent since April this year compared to about 50 to 60 percent pre-Covid-19, which shows how much the sector is tumbling and its prospect if the pandemic persists.
He said: “Most of the tour operators, who target international tourists, actually closed and here at Chintheche Inn, the handover is a result of consequences of Covid-19 where the operator decided to close the
unit ad terminate the contract with the government.”
Central African Wilderness Safaris managing director Chris Badger said as a result of the global pandemic, the company lost most of its international visitors; hence, could not sustain operations.
He said: “Essentially, we lost about 80 percent of our bookings in just three days in April, so we had to take a long hard look at our finances and we decided to either keep all workers along on reduced wages or use the resources to pay off their severance payments, which was substantial but fully deserved.”
On his part, Sunbird Tourism plc chief executive officer Yusuf Olela said their prices remain competitive, promising to ensure that clients enjoy their stay in its hotels.
Meanwhile, Public Private Partnership Commission director of legal, contracting and compliance Harrison M’bang’ombe said Wilderness Safaris has terminated the 20-year contract just after two years.
Already, a joint assessment of the impact of Covid-19 on jobs by Employers Consultative Association of Malawi and International Labour Organisation predicted doom in the sector.
According to the report, the accommodation and food services will have the highest percentage of jobs lost due to Covid-19 among all the sectors, potentially losing up to 14 percent.
Reads the report: “This sector will lose four percent of its jobs if the crisis ends by September 2020, 12 percent if it persists up to December 2020 and up to 14 percent if the situation does not normalise by March 2021.
“These numbers are not surprising given that for Malawi, this sector has been the most affected by the pandemic.”
In June, a preliminary study by the Malawi Tourism Council showed that the tourism sector had lost about K40.5 billion in potential revenue in three months due to the pandemic.
The Reserve Bank of Malawi said due to the Covid-19 pandemic, the tourism industry is projected to contract by 9.9 percent in 2020 from an estimated growth of 4.8 percent in 2019.