Little help from the government frustrates tourism sector

Layoff woes continue

17 May 2020 | Business

Swakopmund • [email protected]

It is no secret that the tourism sector has been particularly hard hit by the corona crisis – a fact that the ministry of environment, tourism and forestry is also well aware of.

“Not only is the sector suffering from considerable losses, government is also experiencing a decline in revenue from this industry,” the ministry said in a statement on Thursday.

In the statement, the ministry said that guesthouses, B&Bs, lodges, backpackers, campsites and restaurants may soon resume operations during the current stage 2 of the lockdown.

The relevant legislation will soon be published in the Government Gazette. However, “Restaurants will still not be allowed to seat customers, only selling take-aways,” it said.

Although the ministry is aware of the situation, it considers these restrictions to be essential to guarantee the health of all Namibians. For this reason, the ministry is in contact with all stakeholders to address the current economic and health realities.

“The ministry is doing its best to make the tourism industry part of government's economic bailout plan,” it said.

Too little, too late

However, it is likely too late for bailouts.

“Despite numerous negotiations and suggestions from the tourism sector, the final modalities of the support package were only announced by government a month later.

At best, they can be classified as too little, too late,” says a letter penned by the tourism association FENATA.

Since the beginning of the corona crisis, the association’s chairman, Bernd Schneider, has sent almost a dozen letters to all stakeholders, especially government, requesting immediate support in the face of the crisis.

His letters contain details about the “economic carnage in tourism” and several suggestions to counteract the negative effects.

He now describes it as “sad, frustrating and heartbreaking” that general support has been limited and little progress has been made to alleviate difficulties. This in spite of the fact that tourism is one of the most important economic pillars in Namibia.

“Most tourism companies are in their fourth month of low to zero income, keeping business alive by tapping their often limited reserves. For most companies, every day of permanent business closure is one step closer when no outside funding can be secured, be it through a government grant, access to bank capital, or a tax cut or tax relief,” he said.

Schneider fears that the “unnecessary talks and the lack of concrete and decisive measures” could lead to a longer economic downturn, which is far longer than the actual pandemic.

The seriousness of the situation in tourism once again made headlines this week, with the Safari Hotel planning to retrench 177 of its 219 employees and cutting the wages of the remaining 42 workers by 50% - a decision that the Namibian Food and Allied Workers Union (NAFAU) is “disappointed” with.

“If management enforces the layoffs before negotiations conclude, a dispute will be submitted to the labor commissioner,” NAFAU threatened on Friday.

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