At the beginning of this year, we had one of the best forecasts on paper. We did not see Covid-19 coming.
Experts expect the recovery of international travel to be more positive in Africa, with most of them believing it is still possible in 2020.
Whereas recovery is expected, tour companies in Uganda are experiencing the full economic brunt of the Covid-19 pandemic.
The Association of Uganda Tour Operators chief executive, Gloria Tumwesigye, spoke with Bamuturaki Musinguzi on the impact of the coronavirus on Uganda’s travel industry.
What is the state of the travel industry in Uganda?
The pandemic has affected global tourism, which is hardest-hit by border closures, grounded air traffic and travel restrictions. Uganda earns over $1.6 billion from tourism annually, although we are yet to compute final figures of losses from the Covid-19 in Uganda and Africa in general. The World Trade Organisation estimates that the pandemic could lead to an annual decline of the sector between 60 per cent and 80 per cent compared with 2019 figures.
Nevertheless, as with the past, tourism is expected to recover faster than other sectors. After September 11 World Trade Centre terrorism, the SARs outbreak of 2003, and global economic recession in 2009, it took tourism 10 months to recover. So, even with this crisis, recovery is expected by the final quarter of 2020, but mostly in 2021. Domestic demand is expected to recover faster than international demand.
As of April 20, 100 per cent of all worldwide destinations had introduced travel restrictions, with 97 destinations totally or partially closed to tourists; 65 destinations had totally or partially suspended international flights and another 39 had closed their borders.
This implies a loss of 850 million to 1.1 billion international tourists translating to a loss of between $910 billion and $1.2 trillion in export revenues from tourism. These losses could cost 100 to 120 million direct tourism jobs.
Please estimate the revenue your members have lost from cancellations?
We continue to measure the impact, but it is challenging because of the varied value chain and huge multiplier effect. The Association of Uganda Tour Operators undertook a study to assess impact on tour operators as well as linkages with other strategic actors and recommend interventions through three stages to avoid total collapse. These interventions should be right after the crisis to spur recovery and bouncing back into business; long term interventions to build resilience and sustainability of tour operation.
How many workers have lost jobs, who were either directly or indirectly employed in tourism?
Tourism accounts for over 600,000 jobs directly on the line. But given its varied value chain and huge multiplier effect, millions more risk losing their livelihood, from the cab driver, to the tomato farmer supplying hotels and lodges. Over 80 per cent of our members have been unable to pay workers and some have laid off staff, and others have slashed salaries to retain a few workers.
The government has proposed promotion of domestic tourism to keep the sector afloat. Does the country have the numbers to sustain the industry?
First, the average traveller is going to be cash-strapped. The ability to travel and general expenditure will be low for a while. Second, international source markets may remain a bit sceptical of international travel. Africa’s high-value international source markets are important but they are still difficult to assess. This is why there has been discussions around the resilience of domestic tourism and how the recovery would be led by business and domestic travel, as has been observed in China and as have other Asian countries that are ahead of us in recovery.
How long do you think it will take the Ugandan travel industry to recover from the effects of the Covid-19?
At the beginning of this year, we had one of the best forecasts on paper. We did not see Covid-19 coming. Experts expect the recovery of international travel to be more positive in Africa, with most of them believing it is still possible in 2020. Whereas recovery is expected, tour companies in Uganda are experiencing the full economic brunt of the Covid-19 pandemic.
Unless external support is provided, tour companies will suffer more harm. This is because they play a core role in marketing and promoting Destination Uganda, bring into the country clients that consume services of hotels, national parks, other destination sites, restaurants, tour guides and handicrafts.
They are the channels through which jobs are created, foreign exchange earned, local investments made and heritage conserved. Thus, supporting these companies in the next 12 months should help to address immediate liquidity challenges.
