Friday, November 27, 2015

Hotels now to feel Magufuli' s austerity pinch

The hospitality and catering industry is expected to take a hard hit following President John Magufuli’s ban of public servants’ meetings and conference from hotels and other rental venues.  According to sources and analysts interviewed by this paper yesterday, hotel owners and caterers stand to lose billions of shillings because they will be forced to solely depend on corporate events whose number is very small compared to that of civil servants’ meetings.  A Dar es Salaam-based analyst, Antipas Massawe said owners of conference facilities and hotels will feel the pinch because their most frequent customers are ministries and government institutions. However, it is also his opinion that the most of the hospitality and catering businesses are also owned by government officials. Opting anonymity an industry stakeholder said hotel owners should now think of alternative ways to sustain their conference businesses.  He suggested they promote their conference facilities outside the country to attract foreign entities to conduct their meetings in Tanzania. “Apart from government ministries and institutions there is a variety of customers including donors, Non Governmental Organisations (NGOs) and international organisations who also use these facilities,” he said. On her part, Travel Consultant Elisha Mayallah said the conference business in hotels is one of the high-income bringers.

President John Pombe Magufuli addressing Members o Parliament (Not in picture) when he inaugurated the 11th House in Dodoma last week. Together with other things, President Magufuli has also suspended unnecessary foreign trips by Senior public servants. Many have applauded the move as the essence of this is to acquire money for free education scheduled to be introduced next year.

Mayallah went on to express mixed feelings over the ban saying while the move will hurt the industry it will nonetheless cut government spending. “I only hope this is a temporary decision until the government’s financial situation improves,” she said hopefully and cautioned that should the ban persist then it would worsen the unemployment plight of youth since most facilities will move to cut down expenses by reducing staff. On Wednesday this week, President John Magufuli ordered   cancellation of meetings and conferences in hotels for public servants in a bid to control unnecessary public expenditure. Instead, now the meetings and conferences will be conducted via video conference that allows persons in two or more locations to communicate simultaneous via two-way video and audio transmissions. The government said the facility will also be free of charge for government users. Speaking at the time, Spokesperson in the President’s Office (Public Service Management), Florence Temba said the directive is meant to cut unnecessary costs that the government incurs in meetings and conferences held at rental places. The ban came but days after the Head of State banned public servants’ foreign trips and the hefty allowances that go with them.

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