Stiff competition in hospitality industry in Lilongwe

The hotel industry in Lilongwe is so competitive that rates sampled in three leading hotels are almost uniform, despite having different grades.

A snap survey by Business Nation showed that the most affordable room at Capital Hotel is at K19 320 ($115) whereas at Pacific Hotel and at Crossroads, the cheapest room is pegged at K17 000 (about $101) per night.

When the Ministry of Tourism graded hotels recently, Crossroads got three stars whereas Pacific Hotel and Capital Hotel got two stars.

The hotel star grading system entails an assessment of both service elements and non-service elements provided at a hotel.

However, our investigations revealed that rates for rooms at the three hotels are almost the same, a thing director of tourism Isaac Katopola says is good for customers.

For example, a deluxe room at Capital Hotel, depending on occupancy is at K21 000 (about $121) whereas at Pacific Hotel, it is at 21 750 and at Crossroads it costs K20 400 (about $122) per night.

Said Katopola: “If the hotel rates are competitive, it means that customers are the ones who will win. What we are seeing is the mushrooming of many lodges and hotels and it is a sign that there is business in this sector.”

But a senior official working for one of the hotels in Blantyre who spoke on condition of anonymity said although more hotels and lodges are being built, business is not healthy.

The official revealed that hotels are being forced to reduce prices because only a few Malawians can afford to go and sleep in hotels because of the current tough economic climate.

“People do not have money and besides government gave civil servants an option of getting cash other than sleeping in hotels. The officers prefer cash to sleeping in hotels. We used to make money when civil servants were sleeping in hotels,” said the official.

When put to him that hotel owners are complaining that government’s decision to give civil servants the freedom to choose where to sleep is hurting the hotel industry, Katopola refused to comment, saying decisions regarding civil servants’ welfare are made at the Office of the President Cabinet.

A manager at the newly built Sogecoa Golden Peacock Harvey He described business as good for them despite being new in the industry.

“We are doing okay. Our standard rooms are now at K13 000 and people are coming in large numbers,” said he.