Malawi's hospitality sector registered mixed fortunes in the first half of this year, with leading players affected by dampened demand due to the closure of United States Agency for International Development (USaid) and continued rising inflation.
Published financial results of Sunbird Tourism plc and Blantyre Hotels plc (BHL), the two Malawi Stock Exchange (MSE)-listed hospitality firms, show that although they posted profits, revenue was subdued due to challenging economic conditions.
Sunbird Tourism plc profit was recorded at K5.4 billion in the half-year ending June 30 from K4.8 billion during the same period last year while BHL plc chalked K3.4 billion profit from a loss of K781 million.
For BHL, while it may boast of posting the first profit in three years, its revenue was largely driven by K5.7 billion finance income from the proceeds of its K62.4 billion rights issue to fund completion of its Protea Hotel Lilongwe Ryalls project.
Sunbird Tourism plc , on the other hand, indicated that US government changes in international aid, particularly the closure of USaid, affected demand while high interest and inflation rates raised operating costs by 33 percent to K12.5 billion.
Reads part of the results: "Locally, the hospitality sector was also heavily affected by changes in the US government policy on international aid.
"In addition, the economic environment for the reporting period continued to be challenging characterised by high interest rates, shortage of foreign currency and high inflation particularly the food inflation, which drove up sthe hotel's operating costs and also affected demand for the hotels products and services."
However, despite acknowledging the challenges in the sector, stakeholders observe the enduring resilience the industry has shown post-Covid-19 pandemic after it reportedly added 70 000 jobs, registered K62.7 billion in investments and contributed 6.7 percent to the country's gross domestic product (GDP), according to Malawi Government Annual Economic Report 2025.
In an interview on Monday, Malawi Tourism Council executive director Memory Kamthunzi said the tourism sector has shown strong signs of recovery, reflected in the significant increase in its contribution to GDP and job creation.
She said: "This indicates resilience and renewed investor confidence and the rise in employment figures highlights the sector's role in economic revitalisation.
"However, this recovery has not been uniform across all tourism-related businesses."
Kamthunzi said while major hospitality establishments, airlines and tour operators have rebounded well, many small and medium enterprises, which form the backbone of the sector, are still struggling with financial constraints, low capacity utilisation and operational challenges.
In a separate interview, Orbis Destination Management Company managing director Innocent Kaliati, whose firm is a travel and itinerary operator, said although tourists figures surpassed the pre-pandemic period at 1.1 million in 2024 from 960 000 in 2019, the post-pandemic recovery remains slow.
He said: "From my perspective, tourism in Malawi has been a rising graph since Covid. It is slow, but it is rising. We are seeing more tourists coming in and the latest statistics show we managed 1.1 million visitors in 2024.
"I also feel Malawi can do better by targeting new markets to supplement the existing ones."
Analysing the financial results of the two hospitality players, financial expert Brian Kampanje said the performance is better considering the acute inflationary macroeconomic environment, but urged the players to be innovative to ensure resilience going ahead.
"While the impact of the closure of significant USaid programmes in Malawi's hospitality industry is not known, the resilience of the sector has been quite good.
"It is also an opportunity for the sector to be more innovative," he said.
On MSE, the tourism sector players have registered marginal share value and market capitalisation gains over the years with Sunbird and BHL share prices at K500 and K15, respectively.
The Malawi Government Annual Economic Report 2025 shows the sector's contribution to GDP more than doubled in 2024 at K865.2 billion from K394.7 billion during the pandemic period in 2020.