Sunbird chair speaks on growth, prospects
In this interview, Malawi Stock Exchange (MSE)-listed local hotel chain, Sunbird Tourism plc board chairperson Phillip Madinga (PM) speaks on the group’s business, growth and what customers should expect. Excerpts:
Q: We note that Sunbird Tourism plc has realised growth in its revenues despite relatively subdued tourism activity and demand for hospitality services in the country. How do you explain the group’s revenue and profit growth?
A
: We employed smart cost management initiatives and the introduction of new revenue streams contributed to continued business growth. We also started reaping and realising additional business from the investments we have made in refurbishment of our entities. Of course, during the year, the corporate segment, at 70 percent of total room nights, continued to be the anchor segment followed by conference segment at 20 percent. Our commitment and ability to provide superior service to our customers while leveraging the diverse portfolio we have has also been key to the performance despite the low demand the hospitality industry experienced during the first half of the year, which led to a depressed performance in other segments.
Q
: In your view, what were the key drivers of the recent financial results for H1 2018?
A
: Sunbird Tourism plc is the leading and preferred brand in hospitality in the country. Sunbird Tourism endeavours to continuously improve its customer service and guest experience powered by continuous product improvements. Sunbird Tourism’s assurance and commitment to the brand promise has been key in ensuring that guests choose Sunbird again and again.
Our main geographical source of business has remained predominantly local at 81 percent while we work to attract more international tourists into Malawi.
Q
: The hospitality industry has recently experienced a slowdown in demand. How is Sunbird Tourism plc overcoming these challenges to sustain business performance and profit growth?
A
: Sunbird Tourism will continue to offer unrivalled guest experience through delivery of high quality products and services to retain and grow the client base in the domestic as well as the international market sectors. The group is further implementing various initiatives to grow other segments, such as leisure and international business in order to diversify revenue source.
As part of our continuous repositioning efforts, Sunbird Tourism is focused on business process re-engineering to ensure efficient utilisation of resources for quality delivery of customer service and products.
Q
: How is Sunbird Tourism plc positioning itself to match and compete with international tourism trends?
A
: There are a number of key product improvement plans that are underway to make sure that we are well positioned to meet the interest and enthusiasm for Malawi as a destination. For example, recently at Sunbird Lilongwe, we renovated and refurbished all the 70 rooms into modern formats with 40 inch flat screen television sets, upgraded furniture and improved a number of amenities to align the hotel to Sunbird’s standards.
Some of the product improvements underway include the following: new state of the art conference hall is under construction at Sunbird Mount Soche in Blantyre.
We also expect to begin the construction of a new four-star 42-room beach resort at Sunbird Livingstonia Beach before year end. In addition, the group has introduced water-based assets at the two lake resorts to reposition our resorts as the preferred leisure destination to meet the needs of an ever-growing leisure segment.
Q
: What challenges do you face in your quest to grow the brand and tourism in general?
A
: New entrants on the market and competition from traditional players in the past few years have posed some challenges for the group. Limited resources for destination marketing has also been a concern, because this has hampered the speed in the growth of the industry in Malawi.
Just like many other businesses in Malawi, we have also been challenged with the frequent interruption of delivery of utilities, especially power blackouts and associated increasing costs from these disruptions.
Q
: What is the outlook for the rest of the year in terms of performance?
A
: Looking ahead, we expect our economy to remain relatively stable. The second half of the year looks relatively positive as we head towards the busy season leading to the May 21 2019 Tripartite Elections next year we are hoping that demand for hospitality business will pick up.
Q
: What opportunities do you see for growth in Malawi’s tourism sector?
A
: We believe the best is yet to come, and we are confident in a growing tourism market in Malawi. As a group, our efforts for growth and expansion are on-going, taking advantage of opportunities and the enthusiasm that has been garnered in the past few years. We are exploring opportunities to further diversify our business and product base by focusing on eco-tourism and more leisure activities.
We are further encouraged by the optimism that tourism will continue to grow and will significantly contribute to the country’s GDP with a forecasted growth rate ranging between 3.6 to 4.5 percent in 2018. We are further thankful to our customers whose feedback has enabled us to discover opportunities for growth, which are well aligned with a particular product demand in the existing market.
We are also thankful to government for identifying tourism as key priority area in our current Malawi Growth and Development Strategy III. We would like to implore on government to allocate adequate resources and support to the tourism sector because we strongly believe that this sector can actually become one of the top contributors to our GDP, if properly harnessed. na
