Hotel owners have been bracing for difficult years as the sector continues to reel from a drop in bookings caused by the Covid-19 pandemic, according to Addis Abeba Hotel Owners Association.
Hotels in Addis Abeba and regions are losing $35 million and $10 million respectively in a month due to the negative effects of the Covid-19 pandemic, surveys by the Association show.
Due to the impacts of the pandemic, the Association said that close to 57 percent of hotel owners in Ethiopia were forced to shift their sector. Some opened hospitals and others are engaging in other businesses.
“Many of them are closing their hotels down,” said Aster Solomon, Association’s President in a meeting about the adverse impacts of the pandemic on Thursday.
Organized by the Addis Abeba Chamber of Commerce and Sectoral Associations, the meeting sought a participation of managements of hotel and tourism sector.
Ethiopia suffered a 35.5 percent sharp decline of tourist inflows as a result of Covid-19, according to Getachew Regassa, Executive Secretary at Addis Abeba Chamber of Commerce and Sectoral Associations. The global figure indicates 60 percent decline in tourist travel.
To stay hotels open despite the pandemic, the government told banks to provide loans with 5 percent interest.
However, implementation went far below what it has to be. “Only few hotels were recipients of the loan due to low level accomplishments from banks,” said Aster.
Sharing similar concerns with Aster, Fantu Golla, Owner of Herfazy Resort in Gonder said,” Banks are not willing to grant us a loan, and therefore, we will not be remained opened unlike what we have been done so far.”
Tourism contributes 9 percent to the Gross Domestic Product (GDP) and hosts 2.2 million jobs.
However, Fantu warned that his staffs can lose their jobs as his business running cost is high despite sector’s poor performance due to the pandemic.
The Covid-19 pandemic hit the aviation sector hard with global cumulative losses reaching $125.9 billion, out of which over $2 billion was incurred by African airlines.“Our Airlines demonstrated agility, quick decision making and resilience that have helped in the face of falling passenger traffic,” Lemma Yadecha, Ethiopian Airlines General Manager for International Services told Origins Business.