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Hotel owners fight to save jobs during COVID-19 crisis

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Added 25th May 2020 07:00 PM

As we speak, hotel occupancy rates have plummeted to less than 5% in the entire country

Hotel owners fight to save jobs during COVID-19 crisis

Susan Muhwezi

As we speak, hotel occupancy rates have plummeted to less than 5% in the entire country

The Uganda Hotel Owners Association (UHOA) is the umbrella body for all the hotels in Uganda. With currently over 520 Member hotels across the country, UHOA is the biggest private-sector association in the tourism industry. Employing 90% of the entire tourism workforce, the hospitality sector is a force to be reckoned with in an industry that is one of the biggest foreign exchange earner for Uganda.
 
As nations and organisations around the world have rallied and rushed to respond to the 2020 outbreak and rapid spread of COVID-19, the Uganda Hotel Owners Association (UHOA) determined that ensuring the safety of all guests and staff at hotels in Uganda was of paramount importance. Sustaining businesses throughout what has been and will continue to be an economically tumultuous time was of primary concern. To that effect, UHOA, at the beginning of the pandemic, conducted meetings with relevant stakeholders such as the health ministry and World Health Organisation (WHO) to deliberate on the best way forward as well as prepare our members for the long road ahead.
 
In order to sustain the hospitality industry, hotel establishments in Uganda had to take drastic take steps to preserve their businesses and the livelihoods that depend on the conservation of those businesses. The hospitality industry and larger tourism sector have been most severely affected by the COVID-19 pandemic. As we speak, hotel occupancy rates have plummeted to less than 5% in the entire country. Only hotels hosting quarantine guests as well as essential service staff remain in operation. 90% of our staff (400,000) are at home with no salaries and we are struggling to meet our statutory tax obligations which include 18 different taxes and 7 licenses (25 taxes and licenses in total). Some of these taxes and obligations include VAT, NSSF, PAYE, hotel tax, local service tax, corporation tax, withholding tax, bar licenses, swimming pool licenses, liquor licenses among many others.
 
At the beginning of the pandemic, the Uganda Hotel Owners Association encouraged cost-cutting measures that delayed harsher action. These measures included staff taking their accumulated leave, with employees remaining on call, and the temporary shutting down of selected floors. These temporary actions were necessary to ensure a reduced long-term impact on the hotels, their employees, and the hospitality industry and economy. However, with the total lockdown of the country, we had to furlough all our staff as the hotels were eventually forced to completely shut down. This without a doubt brought challenges as the hotels could no longer guarantee job security until the economy not only opens up but also picks up which we predict is still a few months away. This particularly strikes at my heart as the Chairlady of the Hotel association because we employ young people who are in the prime of their careers. They have their whole lives ahead of them and we must do everything we can to protect their livelihoods.
 
The Uganda Hotel Owners Association is in continued talks with the Government of Uganda to provide support to the hospitality industry during these times. We have made proposals to the relevant government Ministries for a stimulus/relief package that we believe will help the sector get back on its feet once the lockdown is lifted. Some of the proposals we have put forward include:
 
• A waiver on Pay As You Earn (PAYE) and National Social Security Fund (NSSF) for a period of four months when hotel employees are not earning salaries.
• Rescheduling of loans held by hotels in different banks for a period of 12-24 months.
• Creation of a credit line for hotels to borrow money at zero interest rate to revive hotel operations from the Uganda Development Bank (UDB).
• Marketing budget to facilitate the Uganda Tourism Board, hoteliers and tour operators run a campaign to boost domestic tourism.
 
In addition to the above, we also continue to lobby the finance ministry for tax relief for the duration of this pandemic and are requesting their cooperation in several methods we hope will provide relief to the hospitality and tourism industry, a sector that has a quintessential impact on Uganda's economy and people. Hoteliers have shown a deliberate adherence to the Ministry of Health's guidelines even to the detriment of their businesses, and we are requesting the Government to respond in kind.
 
The Uganda Hotel Owners Association is committed to supporting hotels in Uganda and maintaining the wellbeing of their guests and staff. In times of crisis such as these, extreme measures are necessary for the greater good. By taking preventative actions now, we hope to lessen the already significant impact the pandemic has had on Ugandans and businesses in Uganda. Already, UHOA through her members has contributed sh30M to the National Task Force Committee to purchase relief items like food for our fellow countrymen and women during this lockdown. It is our hope that using the established government distribution channels — which we lack as UHOA — this relief will be able to reach the most vulnerable, including our hotel staff, as we continue working around the clock to get them back into employment.
 
I take this opportunity to salute our health workers on the frontline of this pandemic. The Ministry of Health has done an excellent job protecting Ugandans and we are very proud of you. 
 
We thank President Yoweri Museveni for his guidance during the lockdown. I salute the President on all our behalf for being a beacon of hope during these difficult times.
 
 
The writer is the chairperson of Uganda Hotel Owners Association 
 

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