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Hotel reopening dampened by hurdles, maintenance costs

Tuesday October 05 2021
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Many hotels have also had to spend more in training new workers or retraining the rest after long periods away from work. PHOTO | CYRIL NDEGEYA

By MOSES K. GAHIGI

It is not all rosy as hotels reopen for business as many are still facing operational challenges rooted in Coronavirus pandemic complications.

For example, hotels in upcountry districts like Nyamagabe cannot host events or conferences because there are no Covid19 testing centres close by.

"We have to call people with testing equipment from Huye. At times they come late because they have many orders" said Munyaneza François Savier, the manager of Ubumwe hotel in Nyamagabe.

Service has also dipped as hotels have had to hire new employees who are not yet well acquainted with the work.

Many hotels have also had to spend more in training new workers or retraining the old ones after many months away from work, which adds to the costs weighing them down.

The close of the hotels for such a long time also meant extra expenses for the repai and purchase of facilities and equipment.

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For the big hotels in Kigali and elsewhere the cost of repairs and purchasing new equipment is even higher, which has dampened their resumption.

Some hotels are still battling auctions while others have already gone under the auctioneer's hammer.

 Heeding to the call by the government to invest in the hotel sector as it positioned itself as a tourist and Mice destination close to a decade a go, local businessmen responded, growing the supply of accommodation by 246 percent between 2010 and 2019.

Prior to the pandemic, the industry was growing at a rate of 10 percent per annum, registering up to $1.765 billion in revenues between 2016 and 2019.

However when the pandemic hit, everything went south and the entire industry came to its knees.

Hotel owners are decrying the high interest charges banks continued to charge on loans even after giving them moratoriums.

The cumulative sector interests from March 2020-June 2021 equal to Rwf10.97 billion which they say was capitalised to produce a new outstanding total bank loan of Rwf65.5 billion as of June 2021.

This was only reduced by the payment of Rwf0.64 billion and the total outstanding bank loan became Rwf64.9 billion by June 2021.

From a sample of 21 top local hotels, 81 percent were serviced by the Economic Recovery Fund facility, which set up Rwf50 billion to help the industry.

Loans were restructured as per the guidelines. However those who succeed with the working capital slot were only 29 percent.

Hotels such as The Mirror and Portofino did not survive the auctioneer's hammer, while others are also on the verge of being auctioned off.

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