The Rwanda Chamber of Tourism has appealed for government aid in order to salvage fortunes of the tourism and hospitality sector after suffering huge losses due to the coronavirus pandemic.
In a letter addressed to the Chief Executive Officer of Rwanda Development Board, which was accompanied by a detailed sector report, the Chamber said that the sector lost a staggering Rwf34.9 billion in March this year.
In a detailed breakdown of the loss, the hospitality businesses were the hardest hit with a loss of Rwf13.6 billion, tour operators lost Rwf20 billion, travel agencies Rwf152 million and conference and events recorded Rwf1 billion loss.
Frank Gisha Mugisha, the Director General of the Rwanda Chamber of Tourism at the Private Sector Federation (PSF), said the COVID-19 outbreak happened at the time of the year when the tourism industry records its highest earnings.
“We do not really get more clients in the other quarters than in the first one. Therefore, if the government does not intervene, we’ll have to wait until the first quarter of the next year to register revenues,” he says.
The loss stems from a deteriorating business atmosphere, which is characterised by travel restrictions, suspended events and flights, as countries continue to grapple with the coronavirus pandemic.
Now, the tourism and hospitality sector, which is also saddled with combined debts of Rwf87.7 billion, is seeking a financial stimulus of Rwf7.1 billion to save the battered businesses.
This would support its operations in the first three months of post COVID-19 lockdown.
Lise Tuyisenge, the Managing Director of Phoenix Tour and Travel Agency, said they were struggling to pay back bank loans.
“We are spending without earning. We pay workers, we pay rent and we had booked hotel rooms whose occupants did not come,” he said, appealing for tax and debt reliefs.
For the sector to survive COVID-19 business shocks for one year, it needs a financial support of Rwf29. 9 billion, the report says.
Belise Kaliza, the Chief Tourism Officer of RDB, says that the economic impact of the coronavirus outbreak is not only unique to the tourism industry.
“Just after the outbreak, we are going to really promote domestic tourism. We are now working on a very strong domestic tourism campaign. This shall take place as we will establish heavy promotions to attract international tourists,” she added.
Kaliza said that while RDB does not provide liquidity grants it can negotiate for credit incentives for the private sector.
Providing a funding scheme to the tourism sector is a valid option, she added, but not solely a decision of RDB.
Since the coronavirus outbreak in Rwanda, which prompted a nationwide lockdown, at least 3,888 employees in the sector have been temporarily laid off, according to the report.
The Chamber of tourism is a grouping of five associations including hospitality, tours and travel, association of travel agencies, safari guides as well as the hospitality and tourism training educators’ association.
The report says that the sector needs at least Rwf1.7 billion to keep 24 per cent of the staff in employment for three months after the COVID-19 lockdown.
A full year support, it adds, will call for adjusting this figure accordingly.
The chamber welcomed the government’s efforts in addressing the COVID-19 outbreak and in particular supporting the private sector to operate through the declining business atmosphere.
