Hotels count billions in losses over COVID-19

A view of Kigali Marriott Hotel. Hotels have reported losses following the temporary suspension of many businesses due to COVID-19 threat in the country. / Photo: File.

Hotels in Rwanda have reported losses amounting to over Rwf13 billion since February due to coronavirus outbreak.

Barakabuye Nsengiyumva, the Chairperson of Rwanda Hoteliers’ Association (RHA), on Friday, March 20, told The New Times that some were already laying off workers as a way of mitigating losses and accumulation of unpaid salaries for employees who are redundant.

 

“So far, some of our members say they have already accumulated a combined Rwf13.2 billion in losses. We are still awaiting reports from other hotels so the figure is bound to rise,’ he said, adding that they were in discussions with the government to devise measures to support hoteliers to remain afloat in these difficult times.

 

“The Central Bank has announced some stimulus package in terms of restructuring bank loan repayments but we have not yet started to discuss it widely. We also have issues about taxes since there is no liquidity due to lack of clients,” he said.

 

He said there was need for more discussions with the Government for support to reduce some fixed costs so as to also retain some workers.

There is an average of 7,000 hospitality establishments (including hotels, restaurants and bars and accommodations facilities) across the country which employs over 84,000 workers. Tourism and the hospitality sector currently account for about 142,000 jobs.

Nsengimana said that with the cancellation of flights and conferences, the sector is at risk of losing many jobs due to the crisis.

Laid-off workers speak out

On Friday morning, at least six workers from Kigali Diplomat Hotel received their letters temporarily laying them off.

“Following the outbreak of Corona Virus that has grounded all our operations, we are writing to inform you that we are temporarily laying you off for an unknown period of time starting from 20/03/2020 and when business stabilises we shall call you back,” reads part of a letter signed by the Managing Director of the hotel, Alphonse Semugaza, whose copy was seen by The New Times.

One of the affected workers told The New Times that they were uncertain about the coming days since the job was their sole source of income.

“I have been working at the hotel for over five years and the future is uncertain now. I request that companies take some of their savings and pay us some little money and continue to pay insurance for workers as we wait to go back to our jobs,” one of the affected said on condition of anonymity.

What the labour law says

Patrick Kananga, the Acting Director of Labour Administration at the Ministry of Labour, told The New Times that before the process of laying off workers begins due to economic issues, employers should consult the Labour Inspector for adherence to procedures.

Article 21 of law N° 66/2018 of 30/08/2018 regulating labour in Rwanda stipulates that: “In case of suspension of an employment contract due to economic or technical reasons, an employee cannot be laid off one or more times for a period longer than 90 days during the same period of one year.”

Upon expiry of the period provided for, the employee is considered dismissed and receives terminal benefits provided for by this Law.

Article 22 says that a worker dismissed for economic or technical reasons and whose dismissal does not last more than six months is entitled to be reinstated in employment without competition when they meet the profile required for the position to which the employer seeks to fill. 

On the other hand, Article 31 talks about terminal benefits as a result of economic reasons for an employee who has served for at least 12 consecutive months. The terminal benefits accumulate depending on the number of years they have been working for the company.

editor@newtimesrwanda.com

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