Report No. 62353-MW Malawi Travel & Tourism Public Disclosure AuthorizedPublic Disclosure Authorized Realizing the Potential December 2010 Finance and Private Sector Development Africa Region Public Disclosure AuthorizedPublic Disclosure Authorized Public Disclosure AuthorizedPublic Disclosure Authorized Document of the World Bank Public Disclosure AuthorizedPublic Disclosure Authorized Abbreviations and Acronyms AP African Parks CAMAL Coffee Association of Malawi CAWS Central African Wilderness Safaris CBNRM Community Based Natural Resource Management CEM Country Economic Memorandum COMESA Common Market for Eastern and Southern Africa DNPW Department of National Parks and Wildlife DoT Department of Tourism ESA East and Southern Africa (Region) GEF Global Environment Fund GoM Government of Malawi ICA Investment Climate Assessment KIA Kamuzu International Airport MCCCI Malawi Confederation of Chambers of Commerce and Industry MGDS Malawi Growth and Development Strategy (2006) MoF Ministry of Finance MoIT Ministry of Industry and Trade MSE Malawi Stock Exchange MTAc Malawi Tourism Association (private sector membership body) MTAu Malawi Tourism Authority (proposed regulatory & promotional body) MTWC Ministry of Tourism, Wildlife and Culture ODI Overseas Development Institute NSO National Statistical Office (Zomba, Malawi) PAYE Pay As You Earn (Payroll Tax) PPI pro-poor impact SADC Southern African Development Community SSA Sub-Saharan Africa T&T travel and tourism TFCA Transfrontier Conservation Area THB Tourism and Hotels Board TSA tourism satellite accounts VAT value added tax WTO World Tourism Organization (United Nations) WTTC World Travel and Tourism Council Currency Equivalent US$1 = Malawi kwacha (MK) 152 for the purpose of calculation, unless otherwise stated. 2 Acknowledgement This analysis was prepared at the request of Malawi’s Ministry of Tourism, Wildlife and Culture and guided by the stewardship of Mr. Jeffrey Kanyinji, Principal Secretary, Ministry of Tourism, Wildlife and Culture. The goal of this work was to assess the sector’s current situation and provide insights into its potential and constraints. Working with Jason Agar of Kadale Consultants as the lead researcher, the World Bank team included Hannah Messerli (Senior Private Sector Development, Tourism, Africa Region, Team Leader), Brian Mtonya (Senior Private Sector Development Specialist, Malawi Country Office) Andres Garcia (Economist, Finance and Private Sector Development, Africa Region) and Eneida Fernandes (Tourism Consultant, Africa Region). There were further analytical contributions through which the team greatly benefitted from Sandra Bloemenkamp (Country Manager, Malawi), and Samuel Maimbo (Lead Financial Sector Specialist, Africa Region). The World Bank and consultancy team involved with this report’s preparation and dissemination are particularly grateful to the Directors of Tourism (Mr. Isaac Katapola), Parks and Wildlife (Leonard Sefu) and Culture (Dr. Elizabeth Gomani). A number of other individuals at the Ministry, particularly Mr. Charles Kachelenga (Principal Tourism Officer) and Mrs. Patricia Liabuba (Assistant Director, Safety and Standards) were helpful in gathering key information on the sector. In addition to thoughtful input from stakeholders across the public and private sectors during preparation and dissemination, the study benefitted from keen insights from the peer reviewers, namely: Dr. Ronald Mangani (Department of Economics at the University of Malawi), Jean-Michel Pavy (Senior Environmental Specialist, Zambia World Bank Country Office) and Iain Christie (Tourism Consultant). Such an analysis of Malawi’s tourism sector could only be possible through tapping the frank opinions of private sector tourism operators who propel the travel and tourism sector, and who gave valuable information and data for this review. Their commitment to the sector---today and tomorrow--- is noted and appreciated. The authors hope that this study supports on-going public/private dialog integral to Malawi’s tourism sector becoming both sustainable and economically productive. 3 Table of Contents Abbreviations and Acronyms .......................................................................................... 2 Executive Summary .......................................................................................................... 6 Malawi’s Tourism Sector: Overview ............................................................................ 14 A. Introduction and Study Outline .............................................................................. 14 B. Context ................................................................................................................... 17 C. Malawi’s Tourism Assets ................................................................................... 17 1. Travel and Tourism Sector Profile ............................................................................ 20 A. Economic Review ................................................................................................... 20 B. Policy and Enabling Environment ......................................................................... 27 C. Tourism Hubs and Linking Infrastructure ......................................................... 31 D. Market Structure and Dynamics ........................................................................ 36 E. Resorts and Leisure Centers .................................................................................. 38 F. Product Offerings ................................................................................................... 44 G. Human Resources and Training ......................................................................... 46 H. Visitor Analysis .................................................................................................. 48 I. Marketing and Promotion Activities ...................................................................... 53 J. Conclusions ............................................................................................................ 55 2. Value-Chain Analysis ................................................................................................. 57 A. Definitions and Methodology ................................................................................. 57 B. Analysis of T&T Product Lines .............................................................................. 58 3. Poverty and Environmental Impacts ........................................................................ 65 A. Pro-Poor/Poverty Linkages and Impacts ............................................................... 65 B. Environment and Land ........................................................................................... 69 4. The Case for Travel & Tourism ................................................................................ 74 A. Malawi’s Commodity Dependence ........................................................................ 74 B. Travel and Tourism’s Transformative Potential .................................................... 76 5. Constraints, Opportunities, and Recommendations ........................................ - 79 - A. Summary: Constraints, Opportunities, and Strategic Actions ........................... - 79 - B. Constraints ......................................................................................................... - 82 - C. Opportunities and Recommendations ............................................................ - 87 - D. Way Forward .................................................................................................. - 94 - 4 Annex 1: Persons and Organizations Consulted ...................................................... - 96 - Annex 2: Sources ......................................................................................................... - 98 - List of Tables Table 1: Cross-Country Comparison of T&T’s Contribution to GDP ............................. 22 Table 2 Output multipliers in Malawi – 2005. .................................................................. 24 Table 3: Visitor Access to Malawi by Mode of Transport, 2006-09 ................................ 31 Table 4: Market Share of Domestic and International Air Passengers, 2001-07 .............. 33 Table 5: Comparative Long Haul Flight Costs, 2009 ....................................................... 34 Table 6: Air Travel Comparison Selected East and Southern African Countries ............. 34 Table 7: Beds available Nationwide, 2008 ....................................................................... 40 Table 8: Hotel Room and Bed Occupancy Rates by Zones, 2006-09 .............................. 40 Table 9: Hotel Room and Bed Occupancy by Month, 2008 ............................................. 41 Table 10: Type of Accommodation Used, International Visitors 2006-09 ...................... 42 Table 11: MIT Student Enrolment 2005-10 ...................................................................... 46 Table 12: International Visitors Annual Growth Rates, 2004-09 ..................................... 48 Table 13: Reason for Visit by Source Market, 2009 ........................................................ 51 Table 14: Top 5 Source Countries for Visitors on Holiday or Vacation, 2009 ................ 51 Table 15: Top 5 Source Countries for Visitors on Work or Business, 2009 .................... 52 Table 16: Top 5 Source Countries for Visitors to Friends or Relatives, 2009 .................