Hotels fail to access Shs61.8b Covid-19 stimulus cash

Hotel owners, under Uganda Hotel Owners Association have said they have failed to access the Shs61.8b grant from the European Union and government that seeks to help them recover from the impact of Covid-19.

What you need to know:

  • In June, the European Union and UDB signed a memorandum of understanding in which Shs61.8b was put aside to help in recovery of both the hotel and tourism sectors. Under the arrangement, Shs40b would be sourced from UDB while €6m (Shs24.2b)  would come from the European Union. 

Hotel owners, under Uganda Hotel Owners Association have said they have failed to access the Shs61.8b grant from the European Union and government  that seeks to help them recover from the impact of Covid-19.
Speaking in an interview in Kampala at the weekend, Ms Susan Muhwezi, the Uganda Hotel Owners Association president, said most hotels have failed to access the stimulus package from Uganda Development Bank (UDB) due to existing loans taken out before Covid-19. 

This, she said, has left hoteliers vulnerable and exposed to other challenges that have been exacerbated by Covid-19 related restrictions. 
“Most hotel had loans, which [have] made it difficult for them to get money from UDB. Out of more than 1,000 hotels, only 32 have managed to get [part of the] €6m (Shs24.2b) which the European Union put into UDB as a grant to lend out to hotels and the tourism sector for recovery,” Ms Muhwezi said
Therefore, she noted, they will need to engage Ministry of Finance and Bank of Uganda to liaise with commercial banks to give members relief on interest payments and penalties. 

Beyond this, Ms Muhwezi said, they will lobby Uganda Revenue Authority to exempt hotels from paying value added tax given that hotel occupancy has dropped to 32 percent yet they need occupancy of above 40 percent to find a proper balance.  
In June, the European Union and UDB signed a memorandum of understanding in which Shs61.8b was put aside to help in recovery of both the hotel and tourism sectors. Under the arrangement, Shs40b would be sourced from UDB while €6m (Shs24.2b)  would come from the European Union.  

During a press briefing to announce the Italian Cultural and Culinary Week, Ms Muhwezi also noted that a number of prospective clients had, during the Dubai Expo, raised concern on the quality of services offered by hotels and the tourism, which she said had been worsened by Covid-19 related challenges. 
Therefore, she said, it was important that hoteliers and other key players in the tourism value chain are assisted to access the Shs61.8b grant to improve the quality of services. 

Change of strategy         
Ms Lilly Ajarova, the Uganda Tourism Board (UTB) chief executive officer, said they were in the process of writing a new strategy through which they would market Uganda as a tourism hub. To promote Uganda, she said, UTB will also start regional food and cultural festivals in different parts of the country for Ugandans to appreciate and identify with their traditional food.

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