Tourism sector loses K40bn in 3 months

Malawi Tourism Council (MTC) said that the tourism sector has lost about K40.5 billion in potential revenue in the past three months due to the Covid-19 pandemic.

MTC board chairperson Tim Van Der Linden said Covid-19 hit the sector, which contributes about seven percent to the country’s gross domestic product (GDP).

The tourism sector contributes about K13.5 billion per month to the economy on average.

As of March this year, the sector, which employs about 200 000 or 2.9 percent of the total employment in Malawi, according to the World Travel and Tourism Council, laid off 35 000 employees due to the Covid-19 impact.

Malawi Government is pondering on how best to provide a bailout package to rescue the sector from a complete collapse following suspension of international travel and physical conferencing, among others.

In a letter to the Ministry of Environment and Tourism seeking the bailout package, Linden said the tourism sector is faced with a hard decision about its future and survival in view of the closure of business.

He said despite businesses having seen up to 85 to 100 percent reduced income levels since the outbreak of Covid-19, many businesses are still trying to keep their staff on the payroll.

Linden said such a gesture cannot be sustained considering the damaging economic effects of Covid-19.

Apart from a monetary bailout to cushion wages to sustain the payroll, the tourism sector has also been lobbying government to suspend related taxes such as pay as you earn (Paye), withholding tax, pension and utility bills until business returns to normal.