Hospitality sector on deathbed as Covid-19 restrictions persist
Hospitality investors have warned that current restrictions to prevent the spread of Covid-19 could be the “final nail in the coffin” for the industry. Close to 10,000 employees in the coastal region face lay offs as 85 per cent of hotels and resorts shut down operations as pandemic continues to bite.
In a matter of fact tone about how serious the situation really is, Pride Inn Hotels Managing director Hasnain Noorani said it is a pity that hotels and tourism players in the country are not given the ears required.
“Simple solutions were very possible to enable business to go on, but we were all ignored,” he said, adding that the hotel chain is seriously reconsidering future investments in the various counties as earlier planned.
“If the government doesn’t consider hotels as important, is it even worthwhile building and investing in the 10 new hotels as earlier planned?” Noorani posed in a facebook post.
Kenya Associations of Hotel Keepers and caterers executive officer Sam Ikwaye said the industry is now registering between 7 and 10 per cent uptake in terms of local guests on leisure, conferencing and meetings at the coast.
“About 10,000 staff will be sent home before the end of April, and we are talking about 85 per cent of the hotels shutting down, because if you have a 300 bed capacity and there are no guests, then you are unable to economically maintain this staff,” he said.
The unfortunate situation is now pushing industry players to the wall because about 10 per cent of them are struggling to service loans either acquired from the government’s stimulus package or other financial lending institutions.
Ikwaye industry players are afraid that they may fail to service the loans they acquired from the government as a stimulus package to cushion them against Covid-19 threats.
He said that about 10 per cent of the players will be unable to repay the loans within time.
“We hope they will be able to service it, but with the emergence of the third wave of Covid-19 and containment measures many of the operators have been disadvantaged and this is a headache to many investors today,” said Ikwaye.
The few continuing operations are calling for the government to give some tax reliefs that would ensure they are not overburdened by the biting shortage of guests.
The players have decried the continued imposition of business levies, liquor licences and other levies by the county governments with total disregard of the challenges posed by the Covid-19 pandemic.
“We are asking the government to give tax reliefs to this sector so that they can stay afloat, the charter flights we witnessed are not sustainable and remember prices have been compromised by the situation of the economy,” said Owino.
According to Travelers Beach hotel Managing Director Hilary Siele, the hotel has 85 per cent of its staff placed on leave as the cost of operation remains unbearable.
“We are not able to meet any bills as at now, we are operating below average financially, about the stimulus package, we are yet to get it,we are in a position to benefit and we hope it will go through, we have complied 100 per cent so when it comes through it will greatly help us,” said Siele.
The hotel says with lockdowns and other Covid-19 protocols imposed by government has negatively impacted the tourism sector, now reeling from the economic shocks as a result of the disease.
Out of over 300 staff, the hotel now has only 22 staff remaining at work.“We are operating at below 10 per cent, in fact 85 per cent of our staff are now on leave,” said Siele.