Tanzanian President Magufuli’s order to the government not to use privately owned establishments for conferences and meetings has increased hardship in doing business for hotels.
The government ministries, government departments and agencies were directed by President Magufuli to hold their meetings and conferences in their board rooms or in public owned institutions as part of instituting financial discipline and cutting costs of running the government reports the Citizen.
According to a Survey conducted by The Citizen, the decision to cut back government spending on using private facilities has started being felt in the hotel industry, with hotel owners contemplating their next move.
Oceanic Bay hotels and Resorts based in Bagamoyo, a world heritage site in Tanzania, has declared huge financial losses which have forced the management retrench at least 45 out of 150 worker. The acting general manager of the hotel, Mangale Mwachilungo told The Citizen, that the hotel’s earning have dipped by nearly 70 percent. He further added that, the hotel was earning an average of 10 million Tanzanian shillings per week from conferences, meetings and seminars per week before the government’s decision.
Local and International organizations (NGOs) have also been following the government’s steps of cutting costs thus further affecting meetings and hotels. According to the Mr. Mwachilungo, meetings and events organized under the collaboration of organization and government were put up in public facilities. The sentiments are shared by many other hotels recording losses as well.
President Magufuli’s objective to address carelessness and irresponsible management of public funds within the government is misunderstood by people according to Hotels Association of Tanzania (Hat) Chief Executive Lathifa Sykes. Adding that as hotels suffer the government suffers because the revenue collection will reduce.
Some hotels have reported diversifying their target market to overcome this decision such as marketing more to locals and reaching out to foreign tourists.
