This follows the government order banning ministries, government departments and agencies (MDAs) holding conferences and other meetings in privately-run establishments.
President Magufuli ordered, instead, the use of ministries’ boardrooms and publicly owned facilities as part of instituting financial discipline and cutting costs of running the government.
A survey conducted by The Citizen on Sunday found out that the decision has already started biting, with hotel owners contemplating their next move.
The Bagamoyo-based Oceanic Bay Hotels and Resorts, for instance, declared a huge financial loss forcing management to retrench at least 45 out of 150 workers.
According to the management, the facility’s earnings have dipped by nearly 70 per cent.
During an exclusive interview with The Citizen on Sunday, hotel’s acting general manager Mangale Mwachilungo said before the government’s decision the hotel was earning an average of Sh10 million from conferences, meetings and seminars per week.
“Previously, we could earn up to Sh100 million per month, but recently the amount has fallen to around Sh30 million,” said Mr Mwachilungo. Asked about earnings from other potential clients like local and international organisations (NGOs), he said some have also been following in the footsteps of the government of cost cutting measures, thus affecting meetings and hotels. . “For example, there was this NGO that deals with provision of health education. They had booked with us for 21 participants only to call it off. This denied us Sh11 million. They said they were going to hold it in a publicly-run facility,” he said.
However, he couldn’t establish whether the NGOs were receiving instructions from the government, but he said even meetings and events organised under collaboration of the two sides have evaporated.
Asked about individual customers, families and friends staying at the hotel on weekends and holidays, he said their number too had dropped significantly.
The trend of business, said Mr Mwachilungo, forced hotel owners to cut price of services as one of the short term measures to try and ttract customers while long term plans were sought.
“On weekends, visitors were also given price relief for buffet served for lunch. Entertainment and sports games are offered free of charge,” he said. He lamented that the hotel had incurred costs of training its workers to meet international standards of service delivery and that it was sad to let them go.
An official with Livingstone (Malaika) Beach Resort who asked not to be named because he is not the spokesperson told The Citizen on Sunday that business in the hotel had suffered a huge blow.
He said so far 20 workers out of 70 had their contracts terminated.
He revealed further that, the employer even owed workers salaries for three months.
The source linked the hotel’s financial difficulties to the government ban of public institutions conducting meetings in hotels.
He said one of the major clients the hotel used to have was the Tanzania Ports Authority.
But, top officials with the Travellers Lodge, who preferred anonymity, told this reporter that the government was not to blame due to its decisions, but hotel owners and other stakeholders should be proactive and think of diversifying their businesses.
The source said those complaining had designed their businesses along the lines of hosting seminars, conferences and meetings only.
He said attracting foreign tourists as well as local visitors especially from Dar es Salaam should be some of the approaches to counterbalance business instability.
He said numerous clients coming by their hostel were linked through internet exposures mainly Trip Advisor web page.
“Most group bookings are done through local and foreign tour operators as part of the package tour. Rarely do travellers book with us once in the country,” he said.
Hotels Association of Tanzania (Hat) chief executive officer Lathifa Sykes said that President Magufuli’s objective was to address carelessness and irresponsible spending within the government, but it was misunderstood by some people.
She said the President was supposed to clarify the directives he gave because some entities were running conferences in hotels depending on the dignitaries and the number of participants. “When hotels reduce the number of its workers, then the government gets less in terms of the pay-as-you- earn (paye) tax. Likewise, when hotels collect less revenue as it is happening now, little goes into the government coffers in terms of income tax,” she added.
A cross-section survey conducted to hotels in Dar es Salaam revealed that Peacock Hotel and Holiday Inn were among establishments seriously hit by decisions to restrict conferences.
Hotel’s director Daniel Mfugale said their hotel had received no conference, meeting or seminar organized by government institutions since the directive was issued, thus forcing them to lay off about 10-15 per cent of staff, and more could have their contracts terminated.
He said clients now booking in the hotel for conferences were mainly local and international NGO.
“Conferences organised by NGOs are also not reliable. One of our organisers gathered only 17 people out the 35 invited to attend the training,” he told this reporter.
For his part, the assistant manager with Holiday Inn, Mr Christopher Mutandwa, said some workers in the conferencing department had their contracts terminated following reduction in activities in the section.
According to him, delegates who had been staying at the hotel on official government business were no longer visiting.
“Our hotel has special accommodation charges to government delegates. We are ready to prepare special conferencing charges for government institutions provided they are ready to resume using the hotel for conferences and seminars because also support the government austerity measures” he said.
Source: The Citizen
29/05/2016
President Magufuli ordered, instead, the use of ministries’ boardrooms and publicly owned facilities as part of instituting financial discipline and cutting costs of running the government.
A survey conducted by The Citizen on Sunday found out that the decision has already started biting, with hotel owners contemplating their next move.
The Bagamoyo-based Oceanic Bay Hotels and Resorts, for instance, declared a huge financial loss forcing management to retrench at least 45 out of 150 workers.
According to the management, the facility’s earnings have dipped by nearly 70 per cent.
During an exclusive interview with The Citizen on Sunday, hotel’s acting general manager Mangale Mwachilungo said before the government’s decision the hotel was earning an average of Sh10 million from conferences, meetings and seminars per week.
“Previously, we could earn up to Sh100 million per month, but recently the amount has fallen to around Sh30 million,” said Mr Mwachilungo. Asked about earnings from other potential clients like local and international organisations (NGOs), he said some have also been following in the footsteps of the government of cost cutting measures, thus affecting meetings and hotels. . “For example, there was this NGO that deals with provision of health education. They had booked with us for 21 participants only to call it off. This denied us Sh11 million. They said they were going to hold it in a publicly-run facility,” he said.
However, he couldn’t establish whether the NGOs were receiving instructions from the government, but he said even meetings and events organised under collaboration of the two sides have evaporated.
Asked about individual customers, families and friends staying at the hotel on weekends and holidays, he said their number too had dropped significantly.
The trend of business, said Mr Mwachilungo, forced hotel owners to cut price of services as one of the short term measures to try and ttract customers while long term plans were sought.
“On weekends, visitors were also given price relief for buffet served for lunch. Entertainment and sports games are offered free of charge,” he said. He lamented that the hotel had incurred costs of training its workers to meet international standards of service delivery and that it was sad to let them go.
An official with Livingstone (Malaika) Beach Resort who asked not to be named because he is not the spokesperson told The Citizen on Sunday that business in the hotel had suffered a huge blow.
He said so far 20 workers out of 70 had their contracts terminated.
He revealed further that, the employer even owed workers salaries for three months.
The source linked the hotel’s financial difficulties to the government ban of public institutions conducting meetings in hotels.
He said one of the major clients the hotel used to have was the Tanzania Ports Authority.
But, top officials with the Travellers Lodge, who preferred anonymity, told this reporter that the government was not to blame due to its decisions, but hotel owners and other stakeholders should be proactive and think of diversifying their businesses.
The source said those complaining had designed their businesses along the lines of hosting seminars, conferences and meetings only.
He said attracting foreign tourists as well as local visitors especially from Dar es Salaam should be some of the approaches to counterbalance business instability.
He said numerous clients coming by their hostel were linked through internet exposures mainly Trip Advisor web page.
“Most group bookings are done through local and foreign tour operators as part of the package tour. Rarely do travellers book with us once in the country,” he said.
Hotels Association of Tanzania (Hat) chief executive officer Lathifa Sykes said that President Magufuli’s objective was to address carelessness and irresponsible spending within the government, but it was misunderstood by some people.
She said the President was supposed to clarify the directives he gave because some entities were running conferences in hotels depending on the dignitaries and the number of participants. “When hotels reduce the number of its workers, then the government gets less in terms of the pay-as-you- earn (paye) tax. Likewise, when hotels collect less revenue as it is happening now, little goes into the government coffers in terms of income tax,” she added.
A cross-section survey conducted to hotels in Dar es Salaam revealed that Peacock Hotel and Holiday Inn were among establishments seriously hit by decisions to restrict conferences.
Hotel’s director Daniel Mfugale said their hotel had received no conference, meeting or seminar organized by government institutions since the directive was issued, thus forcing them to lay off about 10-15 per cent of staff, and more could have their contracts terminated.
He said clients now booking in the hotel for conferences were mainly local and international NGO.
“Conferences organised by NGOs are also not reliable. One of our organisers gathered only 17 people out the 35 invited to attend the training,” he told this reporter.
For his part, the assistant manager with Holiday Inn, Mr Christopher Mutandwa, said some workers in the conferencing department had their contracts terminated following reduction in activities in the section.
According to him, delegates who had been staying at the hotel on official government business were no longer visiting.
“Our hotel has special accommodation charges to government delegates. We are ready to prepare special conferencing charges for government institutions provided they are ready to resume using the hotel for conferences and seminars because also support the government austerity measures” he said.
Source: The Citizen
29/05/2016
