What hotel industry will look like after Covid-19 pandemic

The Covid-19 pandemic has hit the world, Uganda inclusive. To what extent has the hotel industry been affected?

Covid-19 has hit the accommodation sector more than we could ever have anticipated. Never in the history of Uganda Hotel Owners’ Association (UHOA) have we dealt with a crisis of this magnitude. One of the biggest effects of the pandemic on the hotel sector has been loss of revenue. We estimate that this year alone, hotels will lose almost $700 million (Shs2.6 trillion) in revenue.

Secondly, with the closure of international borders and airports, our occupancy rates fell to zero per cent in most hotels (apart from the few that had quarantine guests) and this inevitably led to the loss of jobs - about 400,000 of our employees are on unpaid leave and unsure of their job security.

The hospitality sector is interrelated with other sectors such as agriculture, ICT, textile, arts and crafts and manufacturing among others. With the hotels closed due to the Covid-19 pandemic, the impact and loss of income is felt throughout the value chain.

Do you have a business recovery plan for the hotel industry which has taken a beating from the coronavirus (Covid-19) pandemic?
We anticipate a long recovery because our industry depends majorly on the international market. However, as the Uganda Hotel Owners Association, we are engaging government through our parent Ministry of Tourism and Ministry of Finance to work out a stimulus package for the hotel sector.

If we get an affordable credit line or grant to kick-start hotel operations and help hoteliers meets their obligations, for instance rent, overhead expenses and salaries, it will go a long way in our recovery process.
We have also engaged the Ministry of Finance to discuss the immense burden of the 18 taxes and seven licences on hotels and lodges.

Very critical for us is ensuring the livelihoods and future employment of our staff is immediately addressed. It is a priority that all hotel staff will be able to get back into employment once the crisis has been averted.
We are working closely with the Ministry of Tourism and Uganda Tourism Board to develop Standard Operating procedures for the Hospitality Sector. These will soon be launched on June 5 in Kampala.

Which jobs are likely to be transformed to remote work in the hotel industry?
One of the lessons that we have learned from this pandemic has been the idea of Working from Home (WFH). This has been eye opening and it is something that we shall champion as UHOA to ensure continuity of the businesses should another crisis ever affect our industry. Unfortunately, most of the jobs in the hotels are hands on and require staff to be physically present. But a few managerial functions can be shifted online. For instance, UHOA was able to host a board meeting on zoom and it was well attended.

As the pandemic limits people’s ways of dining out in accommodation facilities and other eateries, what incentives does the industry need to weather this storm?
The industry will operate below capacity for a long time and yet the overhead costs will remain as they previously were.
To ensure longevity of the business through this time, the industry will require incentives such as VAT exemption for upcountry hotels which shall be extended to city hotels as well.

We believe waiver of certain taxes such as the PAYE and NSSF for the period that staff were not earning a salary and consolidating the tax regime on the hotel sector will help us go through this difficult time.

The other incentive we think can help the industry is a government funded stimulus package to cushion and offer financial relief to the sector.

Also, Bank of Uganda needs to step in to assist the hotels with loans regarding payments as well as interests and arrears.

What will the ‘new normal’ look like in the hotel industry?
The ‘new normal’ in the hotels is a very ‘lean’ industry. We are going to see hotels operating at a reduced capacity from the sitting space in the restaurants to the reduced number of staff working in the hotels. We will see a shift towards more IT-related transactions, for example, self-check-ins and payment with mobile money or card transactions.

What are the unique challenges the hotel industry in Uganda is facing while doing their business?
The challenges the industry is likely to face include, among others, are lack of business and loss of revenue. Others are job losses, foreclosures from banks.

What trends are likely to shape the hotel industry?
Covid-19 is certainly going to change the old way of doing things. We shall have to adapt to the new business environment to salvage our sector. Some of the new trends likely to shape the hotel industry are the increased use of ICT and technology in the hotels.

We also anticipate seeing more attention to domestic tourism and more campaigns targeting the domestic market. We believe Meetings, incentives, conferences and exhibitions (MICE) will evolve using ICT.

Which skills will be required to drive the hospitality industry post-Covid-19?
The new skills required to drive the hotel industry include, but not limited to ICT. With a lot of work shifting online, one will need good ICT skills to gain employment in the hotel sector.

The other skill that we would require is communications and marketing. We plan to run robust marketing campaigns both for the domestic and international markets and experts in these areas will be highly marketable.
Our new normal now means that hotels will need to pay special attention to the health and safety precautions .