Tourism, hospitality players call for bailout

Sunday April 12 2020

tourists

In the month of March alone, 21 per cent of the tourism and hospitality industry players lost up to Rwf40billion in revenues. PHOTO | CYRIL NDEGEYA 

MOSES K. GAHIGI
By MOSES K. GAHIGI
More by this Author

Tourism and hospitality industries are seeking bailout from the government in a special credit facility and waiver in payments for utilities at least remain open as Covid19 pandemic ravages the economy Most hotels and restaurants have so far laid off workers, with only a few players like Marriott Hotel retaining essential staff.

In the month of March alone, 21 per cent of the tourism and hospitality industry players lost up to Rwf40 billion in revenues, according to Rwanda Hoteliers Association.

 “We are completely down, we are on zero operation, hotels don’t have any cash flow, many have laid off staff, what is more worrying is that we have no idea how long this will take,” said Nsengiyunva Barakabuye, chairperson of Rwanda Hoteliers’ Association (RHA). He said many hotels are still incurring costs, from taxes, salaries and utility bills as well as other maintenance costs. “We are engaging government to see how it can be flexible to accept the deferred payments option for our utilities, as well supporting the industry with a financial bailout so we can pay the remaining staff “This will help us keep hotels open otherwise we are likely to lose more if everything shuts down” he said.

Many hotels are unable to service pay bank loans, yet many now have an additional burden of paying back guests who had booked and made a down payment and later cancelled after the pandemic struck.

The central bank established a Rwf50 billion facility which banks can access to bail out clients whose businesses have been critically affected by the Covid19 pandemic, however, banks are also reluctant to lend to hotels at the moment.

All businesses connected to the tourism, MICE and hospitality ecosystem, for instance transporters, event organisers, suppliers, tour operators, among others have been affected.

Advertisement

Patrick Kwizera runs a tour and travel company, Fine Safaris, which employs three people, but he has been forced to make the difficult decision of laying off his staff because he can’t sustain their salaries.

“Nothing is working now, all my direct clients have cancelled, even if RDB made it possible for tourists to suspend their bookings even up to two years, the uncertainty around the pandemic is scaring off clients” he said.

He said in a month he used to make at least Rwf4million, noting that for tour operators and other businesses tied to hospitality, the impact will even go on long after Covid19 has been subdued.

He noted that even if Rwanda became free from the virus it will change nothing because all their clients come from the countries that are currently most hit by the pandemic, like the US, UK, China and other western countries.

“The industry is expected to suffer longer even from the psychological toll the pandemic has left in its wake, especially among customers from the Western countries,” said Kwizera.

In 2019, the service sector contributed 49.1 per cent to GDP, buoyed by transport services that grew by 15.4 per cent, the hotel industry that grew by 11.6 per cent.

Advertisement