Hoteliers, tour operators demand 40% reduction in utility tariffs

Covid-19 has brought the hotel industry to its knees. Most of the operators have slashed rates on some of the premium packages while jobs have been lost.

Now the industry is seeking for government support in order to remain afloat.

As a way of gaining the muscle in the business, the hoteliers and tour operators want a 40% deduction tariffs for Utilities.

These operators said their businesses are operating under a very difficult circumstances in addition to huge cancellations and massive request for refunds from over 1.6 million visitors who had booked pre covid-19 outbreak.

Speaking to the media over the weekend, the chief executive officer, Uganda Hotel Owners Association, Jean Byamugisha said that without support, the entire industry is operating below capacity and there is need for urgent resuscitation.

She said one of the biggest effects of the pandemic on the hotel sector has been loss of revenue.

With the closure of international borders and airports, the operators said their room occupancy rates have fallen to zero percent in most hotels apart from the few that had quarantine guests.

She said this inevitably led to the loss of jobs and about 400,000 of employees are on unpaid leave and unsure of their job security.

"One of the things that we asked in the stimulus package was reduction for five months on the utility bills. This will help the hotels to be able to navigate the difficult months that  that rendered," said Byamugisha.

The operators also engaged the Ministry of Finance to discuss the immense burden of the 18 taxes and seven licences on hotels and lodges.

They said that it is very critical for them to ensure the livelihoods and future employment of their staff.

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.

Operators believe that waiver of certain taxes for the period that staff were not earning a salary and consolidating the tax regime on the hotel sector will help them go through this difficult time.