The Uganda Tourism Sector has been hardest hit by the outbreak of COVID-19.
Despite the vibrancy and success recorded in recent years, the tourism sector has been hardest hit by the outbreak of COVID-19.
(By Uganda minister Daudi Migereko)
In Uganda, Tourism has been the leading foreign exchange earner, accounting for $1.6b. The sector has been contributing approximately 8% of the GDP and supported 667,600 jobs directly and 1.6 million jobs indirectly. Therefore, the sector's growth has had a tremendous impact on our economy.
The most lucrative tourist source markets are the epicenter of COVID-19. There has been a lockdown of States. Movement/travel embargo has become inevitable. Most of the airlines have suspended operations. All hotels and tour operators in Uganda have received numerous travel and booking cancellations. The majority have suspended operations. The entire tourism sector is at a halt with business running out of liquidity.
At the East African Community (EAC) level, a recent study by the East African Business Council (EABC) says the EAC Partner States will potentially lose about 6.2 million tourists and receipts of upwards of $5.4b for the year 2020; due to COVID-19 and the associated inevitable restrictions. The trickle-down effects will be felt across affiliated industries and the rest of the economies within the region.
Needless to say, the tourism sector is now characterized by a rather pessimistic outlook. This is compounded by the fact that most reports coming from the scientists indicate that a COVID-19 vaccine or cure will only be available probably within a year's time.
The aforementioned economic environment entails peculiar challenges in the tourism sector making it difficult to fulfill obligations, especially statutory, debt servicing, and utility payments.
A government directive granting moratorium; on servicing or payment of dues was sought to cover this period of uncertainty. Similarly, payment of domestic arrears by Government was sought. None of the businesses would want to be found in default because the penalties are punitive. Often times, bordering to business closure.
The fear of foreclosures and or businesses failing to restart is real. The interventions sought by the private sector (UHOA, UTA, AUTO, UTB, and others) are meant to uphold the gains made in the sector in the recent past. These include the unprecedented number of indigenous-owned hotels, lodges, tour and ticketing companies; the increased number of students in tourism schools and institutions, and of course the increment in contribution towards tax payment, forex inflow, and the GDP. The Government has indicated that the interventions sought are being attended to.
In the meantime, what is it that the industry can do to sustain the gains so far registered as we wait for COVID-19 to clear and the situation to return to normal?
For the private sector, the unfortunate temporary virtual closure of facilities can create an opportunity for the business owners and managers to take a second look at their businesses for purposes of re-engineering and re-inventing them.
For instance, reviewing operations, coming up with better plans, improved facility designs and arrangements, bedroom setup, cuisine and menu changes, system changes to promote efficiency and enhance competitiveness; Contingency planning for the future; creation of new rules and cancellation policies; greater staff ability to work using virtual technology; upgrading company websites; travel and tourism industry coming together to collaborate; local operators seeing the value in sourcing travelers from the domestic and regional markets; Upgrading managerial capacity on business crisis recovery action, etc.
In this regard, the Government needs to support the private sector access funding to allow for some of these modifications, changes, and upgrades. Once this support is granted, the Ugandan tourism and hospitality facilities would be highly attractive/competitive and hence patronized by tourists when the situation returns to normal.
On the part of the Government and its agencies (UWA, UWEC & UTB); the game parks and zoos, which are major tourists attraction and generating a lot of revenue, without tourists, will require special funding support, during this period, to sustain the conservation gains so far realized. Secondly, there is a need to prioritize and fund the improvement and development of our tourism attraction sites. Funds permitting, these need to be urgently planned, designed, and developed to acceptable international standards.
They must all be accessible by good roads, air, or water connection; have reliable power, water, communication or IT connection/supply. The sites must have a resting area, with a kitchen, restaurant, and modern bathrooms as these are lacking at most of our sites. Alternatively, within the vicinity of the site, there must be a hotel or lodge offering competitive products at affordable rates.
Arrangements for production, display, and selling quality souvenirs would also be worked on. In effect, this period would enable us to come up with highly competitive products. Meantime, UTB working closely with UWA, our embassies, other government agencies/authorities, and the private sector will continue coming up with and delivering appropriate marketing messages to the country, region, and world.
The outstanding leadership of President Yoweri Museveni has provided in the fight against COVID-19; where the spread has so far been well handled and the impressive recovery rate of the sick registered creates an opportunity for Uganda to reposition herself in the area of medical tourism similar to the one which emerged during the fight against HIV/AIDS.
Many professional and benchmarking meetings and conferences are likely to come to Uganda. If this could be coupled with enhanced improvements in our health system, adequately equipping and remunerating our medical teams as the President emphasized in his Sunday, April 19, 2020 address to the nation, many patients from Africa would end up in Uganda for treatment.
After all, the message is now clear that the European and Asian countries, where we have been sending our VIP patients, have enough patients of their own and will not have space, time, and resources for those from Africa.
Fortunately, already a good number of patients from some Afri-can countries have been accessing specialized treatment at Nakasero Hospital, Nansana Urology Hospital, etc. Incidentally, whenever we meet medical experts from Western countries, we are reminded that in the 1960s and early 70s, Mulago was one of the world's leading cancer and ophthalmological studies and treatment centers.
Mulago has just been refurbished. We urgently need to see a return on that investment. All that Mulago needs is to be equipped with the state-of-art equipment, capitalize on its brand name, and properly remunerate its experienced medical professionals.
We shall then be in a position to easily promote and support medical tourism as a country. This will in turn enable us to earn part of the $1b, which Africa has been spending on treatment of her VIPs in Europe and Asia. I believe we shall have emerged out of the COVID-19 pandemic stronger. Our Minister of Health and her team will, again, be saluted on a job well done.
While our main focus is to reposition our tourism industry, we are aware that tourism thrives only where there is guaranteed peace and security. Without a doubt, the NRM government has succeeded in mainstreaming matters of peace and tranquility in the country. This is something we must take advantage of.
Equally, matters of economic growth and development are critical to the growth of tourism numbers are they domestic or from outside source markets. It is a fact that in order for citizens of a country to be able to plan and undertake travel as tourists, they must be gainfully employed, with access to disposable income, ready to save and ready to develop a travel culture.
It will, therefore, be necessary for Uganda to restructure her economy to redirect labor towards the highly productive and rewarding agro-processing, manufacturing, service, and IT sectors; where incomes are meaningful. Since tourism is leisure and business travel, creating domestic tourism demand will be possible with an increase in household incomes, which is certainly possible through industrialization.
This will entail pursuing strategic programs, which will lead to riding the country of subsistence agriculture and elimination of over-dependence on imports, foreign manpower, and companies.
We shall, however, need to identify key flagship industries upon which other industries can an-chor to takeoff. This is what partly explains the emergence of Asia as the factory of the world and the increased flow of tourists from Asia especially China. This in part ex-plains China's domestic self-reliance in terms of consumption of tourism products.
Therefore, for Uganda and other African countries to ensure the survival of the tourism the sector, the general takeoff of our economies, with a clear focus on sectors that can create meaningful jobs, ensure enhanced purchasing power within our economies and curtail capital flight, is critical.
This will give our people the capacity and means to participate in domestic and intra-Africa tourism; as is now being looked at as one of the avenues of sustaining the sector. Meantime, we should also continue courting the traditional source markets in anticipation of better times, in the post-COVID-19 period.
Written By Chairman of the Uganda Tourism Board