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Govt attempts to save hotel sector with Sh2bn exchequer support amid redundancy notices

NAIROBI, Kenya, Jun 1 – The government will extend Sh2 billion exchequer support to hotels and related establishments as part of the Sh53.7 billion stimulus program, to shield jobs in the sector amid redundancy notices.

The financial support was announced by President Uhuru Kenyatta at State House Nairobi during this year’s Madaraka day celebration that was held virtually in compliance with the social distancing measures laid out to contain the spread of the coronavirus.

Kenyatta said the move would jumpstart the tourism sector and protect its players from heavy financial losses.

“…. My Administration will refocus our intervention by offering an initial Sh2 Billion exchequer support to hotels and related establishments to ensure that they maintain their staff compliment,” Kenyatta said Monday.

Along with tea exports and diaspora remittances, tourism is one of the country’s top sources of hard currency.

In 2019, earnings from the sector hit Sh163.56 billion, thanks to an increase in the number of tourists.

The sector has however suffered some of the most severe shocks since the first case of the coronavirus was reported in the country in mid-March.

Restricted movement, termination of international flights, and the introduction of social distancing protocols are the major culprits of the sector’s downfall.

Thousands of jobs are already at stake, with several hotels stating they are laying off or sending their workers on unpaid leave due to constraints occasioned by the virus.

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Jobs Lost

Last week, the management of Fairmont The Norfolk and Fairmont Safari Club said they were closing the hotels indefinitely and firing all their workers.

The company’s Country Manager Mehdi Morad said the virus has resulted in the disruption of their business both now and in the foreseeable future, adding that they had been left with no option but to close the business indefinitely.

Meanwhile, the Serena hotels announced Sunday that it had sent all its employees on unpaid leave until further notice.

The same script has been written across the sector, with restaurants, not having been spared.

On March 22, the government directed restaurants to only sell takeaway food and shut down bars and clubs indefinitely.

However, on April 27, the government gave restaurants the green light to reopen but only if management followed the strict measures laid down by the government. However, many restaurants are yet to open in the city center even as managers continue counting losses.

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