94% of hotels report reduction in client as main challenge-survey

.The survey which was led by Dr John Mayanja Bbale, a senior lecturer School of Economics states that why the challenge has been one major issue is because Uganda’s tourism sector is based on foreign tourists as minimal efforts have been undertaken to develop local tourism. PHOTO/ FILE

By MARTIN LUTHER OKETCH

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At least 94.5 per cent of the tourist enterprise (hotels/lodges, bars tour and travel) reported reduction in

the number of clients has been cause Covid-19 pandemic and is their main challenge among others, a survey by Makerere University School of Economics has revealed.

The survey which was led by Dr John Mayanja Bbale, a senior lecturer School of Economics states that why the challenge has been one major issue is because Uganda’s tourism sector is based on foreign tourists as minimal efforts have been undertaken to develop local tourism.

Presenting the survey findings in a meeting held at Makerere University School, over the weekend,  Dr Bbale said: “52 .29 per cent of the enterprises reported the inability to pay workers attributed to poor cash flow as tourist related activities came to a standstill with closure of the international airport and borders. 39.65 per cent of the tourist enterprises reported the inability to pay enterprise utilities.”

“Interestingly, only less than 1 per cent of the enterprises reported legal suits as a Covid-19 challenge to business operations, while 13.92 per cent reported inability to collect debts as Covid-19 business challenge,” he added.

Dr Bbale said 95 per cent of the tourism enterprise did not receive any form of government support for their businesses since the outbreak of Covid-19 pandemic despite the challenges faced by businesses.

However, on the other hand, he said 3 per cent of the respondents received Covid-19 support from the government in the form of deferred payments for taxes, rent and NSSF, among others.       

He also said 1 per cent of the surveyed enterprises received financial support from the government to curb the Covid-19 business risks.

On the enterprise employment during Covid-19, Dr Babale said the results show that Covid-19 has had a devastating effect on employment. “Laying off 81 per cent (permanent workers) and 62 per cent (part time workers),” he said.

Dr Bbale further explained that the survey results reveals that there has been increased cancellations of bookings and trips have affected the ability of hotels to operate across the country, adding that laying off of workers has affected productivity since employees are required to perform multiple tasks without increasing their wages which demoralizes by reducing productivity.

“In addition, marketing is also affected by the pandemic since employees no longer travel to the field services due to fear of contracting the virus,” he said.   

 Putting forward some recommendations to the government to save tourism industry and saving employment in the tourism sector during Covid-19, he said the government needs to provide business recovery loans/grants to the tourism sector at zero interest rate, develop strategies that promote sustainable tourism by empowering local people to support the tourism sector for example waving off taxes for the tourism sector to enable them pay workers.