NAIROBI, Kenya, June 18 –More than 90 percent of employees in the hotel sector in Kenya were laid off in April, owing to the outbreak of the coronavirus disease that slowed down the country’s economic activities, a new study says.
The Monetary Policy Committee Market Perception Survey for the month of April 2020 revealed that the majority of the workers that were sent packing during the period were on casual, permanent, and contracted duties.
“At the time of the Survey over 90 percent of hotel employees had either been laid off (casual and contract staff), or on furlough (permanent staff), due to the hotel closures resulting from COVID-19 pandemic,” reads the survey.
According to the study, industry moguls on average expected the hotels to remain closed for about 3-6 months, following Government’s efforts to contain the pandemic, and reopen sometime during the second half of the year.
Further, 95 percent of hotels had experienced over 90 percent cancellation of bookings for April, May, and June due to the COVID-19 pandemic.
The observation, therefore, led to 60 percent of the industry players projecting over 90 percent loss in 2020 due to cancellations and closures as most respondents expected closures to extend into the next 3 – 6 months, and into the second half of 2020, hence eroding the peak season’s revenue gains.
The study comes at the backdrop of the government’s efforts to reopen the sector in order to rescue it from witnessing further losses under the strict Ministry of Health guidelines.
According to the Monetary Policy Committee, market perception survey done in May only 19 percent of the hotels have since reopened.
Those surveyed reported zero forward bookings and only 5 percent had forward bookings for the period.
Another 75 percent of the respondents said they are in the process of resuming operations amid slow economic activities witnessed in the country.
Most hotels and restaurants were closed from mid-March, soon after the country recorded its first COVID-19 case.
The industry players however said that reopening the sector with curfews and lockdowns in Nairobi and Mombasa, and with airports closed will not be cost-effective.
The reduction in the travel and tourism industry owing to the coronavirus pandemic has influenced unemployment because major tourism sites are mainly located at the coast of Kenya and a few other upcountry destinations.