Uganda’s tourism feels COVID heat

EU to the rescue

The Uganda Hotel Owners Association CEO, Jean Byamugisha, says the industry has lost over US$25 million. Byamugisha says during the COVID-19 lockdown, close to 400,000 hotel staff were sent home. The majority has not returned to work. The hotel industry employs an estimated 450,000 staff according to UHOA statistics.

In 2014, tourism became, for the first time, Uganda’s biggest foreign exchange earner after it fetched US$1.4 billion in 2013/14, up from US$ 1.1 billion the previous year, according to central bank figures.

The hospitality industry is one of the service industries that have been hit hardest as the global lockdown of economies has compelled airlines to suspend flights.

In March, Kampala hotels with almost zero occupancy sent hundreds of workers on forced leave. Kampala Serena Hotel has sent 350 staff on forced leave and retained only 50 employees.

Byamugisha says Uganda could lose about US$ 1.6bn tourism revenue; of which 45% comes from the hotel industry. She cites a recent study by the United Nations Development Programme which said in five years’ time, Uganda will not have achieved the 1.6 million tourists who have been coming in annually.

She said it is crucial that the government provides tax holidays or a stimulus package to resuscitate the sector.

Byamugisha was on July 25 speaking at a press briefing organised by the EU delegation led by the EU ambassador to Uganda, Attilio Pacifici. The European Union ambassadors were on mission to Kasese, Kanungu, and Fort Portal to meet lodge owners and tourism operators.

The EU is providing Uganda with a €6 million for the tourism sector in form of grants to the private sector.  The money will be channelled through the Uganda Development Bank where it will be accessed at a discount of 8%.

The EU ambassadors to Uganda appealed to the government for a comprehensive master plan to resuscitate the tourism sector.

The delegation comprised the ambassadors Jules-Armand Anambossou (France), Massimiliano Mazzanti (Italy), Rudi Veestraeten (Belgium) and the Austria Head of Office, Dr. Roswitha Kremser.

Veestraeten said Uganda cannot just sit back and wait for the crisis to be over. If Uganda does that, it might take a long time before this sector recovers, he said.

Mazzanti, the Italian ambassador said reopening Entebbe Airport will be key.

“Uganda has to find its way in this. It is a landlocked country (and) if you do not open the airport, there will be no economy coming back.

“When we talk about tourists, they travel by plane, there is no other way. They come to the country, they will revive tourism.”

International outlook

According to the United Nations World Tourism Organization (UNWTO), international tourist numbers could fall 60-80% in 2020 when compared to 2019 figures. The UNWTO’s tourism barometer released on May 7, shows international tourism fell by 22% in the first quarter of 2020 and is expected to decline by 60-80% over the whole year. There were 67% million fewer international tourists up to March which translates into US$ 80bn in lost revenue.

Peering into the future, UNWTO says prospects for the year have been downgraded and uncertainty continues to dominate.  Current scenarios point to possible declines in arrivals of 58% to 78% for the year. These will depend on the speed of containment and the duration of travel restrictions and shutdown of borders.

Domestic demand is expected to recover faster than international demand according to the UNWTO panel of experts’ survey. The UNWTO also estimates between 100-120 million job losses.

The majority destinations expect to see signs of recovery by the final quarter of 2020 but mostly in 2021. Based on previous crises, leisure travel is expected to recover quicker, particularly travel for visiting friends and relatives, than business travel.

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