The Executive Director of Uganda Hotel Owners Association (UHOA), Jean Byamugisha has revealed how COVID-19 has hit hard Uganda’s hospitality industry. She says hotels in Uganda have so far furloughed over 400,000 staff.
A furlough is a temporary leave of employees due to special needs of a company or employer, which may be due to economic conditions of a specific employer or in society as a whole.
These involuntary furloughs may be short or long term, and many of those affected may seek other temporary employment during that time.
In an exclusive interview with Business Focus, Byamugisha reveals how COVID-19 continues to affect the hospitality industry and what they are doing to remain in business.
Below are the excerpts of the interview;
COVID-19 has hit almost all businesses and the economy at large. What’s the impact of COIVID-19 on Uganda’s hospitality industry?
COVID-19 is and has been one of the biggest crises we have ever faced as the hospitality industry in Uganda. It was sudden and fast, leaving us with no room for contingency plans.
We still don’t know what the future holds and for the most part we are counting losses for the rest of 2020. Currently, we have over 400,000 hotel staff furloughed. Many are home with no salary and most worryingly with no job security as none of us can predict when the industry will be operating at full capacity.
The industry is predicated to lose 1.6BN dollars (Shs6 trillion) this year and for the accommodation sector we predict to lose almost 600M dollars (Shs2.27 trillion). This by any and all accounts is a big hit to the sector.
Hotels and tourism are inseparable. In your opinion, how has this pandemic affected Uganda’s tourism sector?
Uganda’s tourism sector is one of the sectors that have been hardest hit by the COVID-19 pandemic.
The majority of our industry depends on international tourism. Domestic tourism is not enough to sustain our industry. With international travel at zero percent now due to the closure of international borders and travel advisories warning against any form of international travel, the tourism industry in Uganda is now at a complete standstill leading to a loss of about 1.6BN dollars for our economy.
The value chain in the tourism industry is very big, closure of hotels means no market for agricultural products, soft drinks, entertainment all of which affair to the growth of the sector and the economy.
What is UHOA doing to minimize on the toxic effects of COVID19?
First thing we have done is lobby government for a stimulus package for the hotels. Hotels are operating at 0% occupancy and yet they still have loans to pay, over head costs like water, power and security to pay every month as well as statutory tax obligations.
Without a stimulus package, hotels will find it very hard to operate but most of all hotels will find it very hard to reemploy the staff currently on unpaid leave.
Secondly, in partnership with the Ministry of Tourism, we are developing Standard Operating Procedures (SOPs) to guide the hotels through the reopening and working through what will be our new normal for a long time.
Lastly, we are doing everything we can to ensure job security for our staff. This industry employs a lot of young people and young women and it’s really important to us that we get hotels open and people back in employment as soon as possible. However, we are very careful to ensure that we follow all the procedures to guarantee staff and guest safety at the hotels through the COVID-19 period.
You have previously complained about the tax regime not being fair to the hotel sector. Are you engaging government to reduce on these taxes?
Absolutely. The UHOA Chairlady is very passionate about this issue and has led many of the discussions with key government Ministries and Agencies to get relief for the hotels.
In your opinion, what’s the future of hotel and tourism sector in light of COVID-19 pandemic?
I am very optimist about the future of the tourism sector not just in Uganda but worldwide as well. When we get through this pandemic people will be looking forward to travel.
Yes, it might take some time as we get used the new normal of working from home as well as building our disposable income to be able to travel again but the tourism and travel industry will rise again and we shall be ready to receive all our guest both domestic and international as soon as it’s safe to travel once more.