The Ethiopian tourism and hospitality industry has been hit by COVID and the northern conflict. Restrictions and travel bans after the COVID-19 pandemic have limited the profits of major hotels, resorts and other institutions in the tourism and travel value chain. However, in the midst of such drawbacks, the Ethiopian hotel and service employees federation is positive that the homecoming call can benefit hotel and other services to make their way out of this setback.
ABN speaks with Dr. Fitih Woldesenbet, President of the Ethiopian Hotel and Service Employees’ Federation on topics related to the Great Ethiopian Homecoming call.
The Ethiopian Hotel and Service Employees’ Federation is working with Tourism Ethiopia, aiming at enhancing the promotion and marketing of famous tourism destination hotspots. The federation is hopeful that through robust and coordinated marketing campaigns the diaspora community can be prompted to visit all touristic places. Such activities can thus stimulate growth in the tourism industry.
Dr. Fitihhas also reiterated that creating permanent customers/tourists for Ethiopian hospitality industry is of paramount importance if the actors of the industry are to recover from their unfavorable economic conditions. To this end, the federation is planning to organize creative events, promotion of local tourism. Tour operators are also preparing special packages tailored to the needs of customers. Dr. Fitih specifically mentioned the case of China who benefitted through the promotion of local tourism activities.
Speaking of the stand of hotels and other related service sectors, the president said that construction of over 20 international brand hotels in Ethiopia halted due to the conflict in the northern Ethiopia. The hotel industry is one of the hardest hit by the COVID-19 epidemic in the world. Additionally, Ethiopian Hotel and Service Employers Federation (EOTF) President said that the hotel industry is being challenged due to the ongoing political tensions in the country.
The President of the Federation, Fitih Woldesenbet (Dr.) said, “The government’s response to the recommendations made to the hotel industry to recover from the pandemic has saved the sector from further damage.” The implementation of the COVID-19 protocol has helped hotels to resume services which were formerly shut down due to the pandemic. Fitih also said that the loan service and other decisions necessary for the hotel industry have been implemented so as to aid the industry on its road to recovery.
“All hotels in Ethiopia are owned by Ethiopians and has urged the government to support the sector on a larger scale so as to encourage local investors. Also, most of the hotels in operation were built 10 to 15 years ago with the aid of various government incentives.”
Hotels’ loan repayment was approved by the National Bank on a one-year basis due to the Corona virus, but the federation has requested for a further five-year extension of the loan. The request was made because while the loan interest was accumulating, the hotels and other hospitality institutions were not hitting required profit targets. To add salt to the wound, the political tensions and the corona virus were not also helping the situation, hence the need for the loan extension request.
Dr. Fitih has also said, “In addition to the damage due to the corona pandemic, the war is hurting the nation in two ways; “One is the destruction of hotels and the loss of jobs due to the war. The other one is the call by the US to its citizens to withdraw from Ethiopia. The revenue that the hotels used to get from the US citizens has dropped significantly as a consequence. Dr. Fitih called on the government to take action without causing serious economic damage to the social fabric of the country.
Fitih also pointed out that the growth of the hotel industry in Ethiopia has been appreciable before the abovementioned setbacks. According to him, “The construction of 20 international hotels has stalled due to foreign exchange and lack of interest from investors.” Despite this, the hotel industry is still a promising sector. He said the annual growth is also appreciable which can prompt other investors in the area to engage in hospitality endeavors.
The president stressed that all hotels in Ethiopia are owned by Ethiopians and has urged the government to support the sector on a larger scale so as to encourage local investors. Also, most of the hotels in operation were built 10 to 15 years ago with the aid of various government incentives. These hotels and hospitality institutions now have to pay off their bank debts but the political situation of Ethiopia over the past five years is not in line with the hotels’ ability to repay their loans.
Therefore, if the government decides to extend the loan before these loans are registered as bad loans, it will save the sector from collapse and damage to the country, stressed Fitih. Currently, the reason why hotel services in Addis Ababa are expensive is because they have to charge higher amounts of fees in order to make substantial profits so as to repay their loans in 10 to 15 years.
“’The Great Ethiopian homecoming’ call by Prime Minister Abiy Ahmed will stimulate the hotel industry. Hotel and similar service providers will offer a 30 percent discount to these parties.”
Whenever hotels offer expensive services, international institutions and countries are forced to hold events outside of Addis Ababa; “This will not only hurt the competitiveness of Ethiopian hotels, but also reduce the number of conference tourists coming to the country,” he said.
There are many historic sites and monuments in northern Ethiopia, and hotels that serve tourists have been shut down. How many hotels were destroyed in the war? “We have no organized information because the war is still going on,” said Dr. Fitih.
Wrapping up his remarks, Dr. Fitih said that the influx of one million Diasporas into Ethiopia in response to “The Great Ethiopian homecoming” call by Prime Minister Abiy Ahmed will stimulate the hotel industry. Hotel and similar service providers will offer a 30 percent discount to these parties,” he said, adding that one million Diasporas are not expected to arrive in the next few days, but they are expected to come at a convenient and longer period of time.