What has happened to hotels in Uganda after CHOGM?
04 May 2010 Leave a Comment
in Hospitality industry, Uncategorized
Dear people,
I have been reading pieces in newspapers about what has happened in Uganda after CHOGM but I have particularly picked interest in the numerous hotels that were built in and around Kampala prior to CHOGM. What has happened to them after CHOGM?
As you all know,the hospitality industry is a young industry in Uganda compared to the developed nations and I’m afraid there was an element of Bandwagon in the way people invested in hotels before Uganda hosted Chogm. I even heard that president Museveni plans to become a hotelier in his retirement(If he ever retires).
After Chogm, the occupancy level in hotels definitely became so low for obvious reasons. They are now few VIPs in town, not to mention that our tourism industry is still in crackers. Ugandans are not travellers within their country. Few people have got money to spend by the looks of the economy alone.
Africa is a continent that seems to specialise in symbolic hotels which, for months or years, are microcosms of their countries’ tumultuous histories. They are buildings where atrocities are committed, coups consecrated, embryonic rebel governments lodged, peace deals signed, and when the troubled days are over, they still miraculously come up with nice food, fresh tea or coffee and CNN in most rooms.
In Rwanda, that role is played by the Mille Collines hotel, where the management stared down the Hutu militiamen bent on slaughtering terrified Tutsi guests during the 1994 genocide. In Zimbabwe, hotel Meikles played that role, where armed white farmers rubbed shoulders with sanction-busters during the Smith regime. In Ethiopia it is the Hilton hotel, where during the Mengistu years some staff doubled as government informers. In Uganda, the Nile hotel was the centre for screaming of suspects being tortured by Iddi Amin’s police while in Congo the honour most definitely goes to the Hotel Intercontinental which acted as the emblem of Mobutu’s regime as his leopard skin hat.
The biggest concern for anyone setting up a hotel in the country is the cost of land and prime location. The budget hotels need land cheap to keep costs down. The government addressed this by giving free land to investors but they ended up with a lot of problems as we saw with the Shimon Land project donated to the Saudi Arabian prince to build a hotel. An investor argues that after Chogm they will bring down their cost per room by as much as 10 per cent but who is occupying these rooms now. Hotel operators in Uganda seem to be less sophisticated with poor strategies and tactics to maximize revenue and control expenses as evidenced in poor organizational structures and technology.
I’m afraid that some hotel investors did not take the time to properly research markets before swooping down to set up hotels in Uganda. Value should be based on net income trends, while speculation should involve complete market and property research before any investment is made. Asset value will ultimately return with new economic prosperity, political stabilization, and consumer confidence. This may take several years with certain ebbs and flows of transactions, mergers, and/or other shifts in hotel ownership structures.
The successful survivors in the hotel sector are those participants who consciously, strategically, and systematically evaluated the macro environment in the country before any investment was made. The band wagons have already lost out and turned their hotels into something else.
Abbey Kibirige Semuwemba
United Kingdom
