The hotel industry was rocked hard during the COVID pandemic and is still in its recovery stages. This coming Ethiopian Christmas holiday, this recovery is said to receive a boost from the Great Ethiopian Homecoming Challenge which aims to draw one million people. Early last week, Demeke Mekonnen, Deputy Prime Minister and Foreign Minister of Ethiopia, and Chair of the Committee for the challenge, noted the encouraging response by people to accept the challenge and the same sentiments were echoed by the committee that was established to facilitate the Great Ethiopian Homecoming Challenge. The committee announced that it has finalized preparations to welcome the massive influx of Ethiopians and friends of Ethiopia who are expected to take on the Great Homecoming Challenge.
In light of this positive turn for the hotel industry, Capital caught up with Aster Solomon, President of the Addis Ababa Hotel Owners Association- an association which has more than 176 active members, for insights on the hotel industry. Excerpts;

Capital: What is your assessment on the preparation of member hotels for the upcoming Ethiopian home coming challenge?
Aster Solomon: The Great Ethiopian Homecoming Challenge aims to draw one million people home ahead of the upcoming Christmas holiday. Our association has 176 member hotels. We are contacting and working with different stakeholders including the Ministry Culture and Tourism, airlines, hotel owners and tour operators committee that was established to facilitate the Great Ethiopian Homecoming Challenge to play our role in the effectiveness of the event.
Different private and government-owned hotels, have already announced discounts on their services to make the challenge attractive to all, and our member hotels have made discounts up to 30 percent on their part.
Most of the hotels are making themselves ready with different platforms, and are looking forward to the event with much pleasure. Additionally the Addis Ababa Tourism Bureau will also pay visits to our hotels to see the preparation.

Capital: What is your expectation from the event?
Aster: With the influx of this magnitude we have high expectations for the bounce back of the hotel industry within a short period. Following the global pandemic, the hotel industry was hard hit and the hotel occupancy rate in Addis Ababa and major regional towns had dropped to almost zero. Following the mass vaccination, the industry seemed to be slowly getting back on track but it took a blow from the political instability. So in this regard the mass exodus of people back to their homeland will create a rise in the industry and it will be a great result to achieve in my opinion.

Capital: Is there any activity you are doing regarding the closure of some hotels in relation to the current situation of the country?
Aster: We are keenly monitoring the situation, even though not deeply. We hope that quick solutions will be provided for the same.

Capital: What is your view on the current hotel industry?
Aster: With regards to what is impacting the sector, beside COVID-19, the instability of the country is having an unprecedented impact on the Ethiopian hotel industry.

Capital: It is said that the loan repayment period which the government gave at the time of the pandemic to support hotels is drawing to an end. What is your evaluation on this?
Aster: After the outbreak of the pandemic the hospitality industry players requested the government for a provocation package that can help them rescue their businesses and retain their staff at these trying times since travel restrictions, flight disruptions, social distancing and lockdown directives have brought down the local hospitality industry to its knees.
Therefore the government decided to support hotel owners and tour operators who sought government assistance to withstand the severe impacts of COVID-19 which brought the hospitality industry to a standstill.
The pandemic has taken a heavy toll on all sectors of the economy, particularly the hotel and tourism sectors. It can be recalled that with the exception of hotels that offered special services, some closed down a year ago, thus the government decided to provide loans for the hotel and tourism sector. Accordingly, the government has been able to lend 3.3 billion birr for six months, even though the hotels had requested 6.6 billion birr for one year.
Although the government’s move saved the sector at the time, the threat to the hotel sector remains unresolved unless the loan term is extended.
Hotels are still in danger if their repayment period is not extended as they already have loans for construction and other purposes other than the Pandemic Rehabilitation Loans.
Even if lenders understand the problem of hotels and want to extend the repayment period, they will not be able to do so without a directive from the National Bank of Ethiopia.

Capital: What will be the volume of effect if the government does not accept your request for loan extension?
Aster: As the hotel industry both here and globally continue to recover from the hard hitting pandemic, most if not all hotel industries are operating in nil profits with their revenues dwindling drastically. The hotels are not making profits at this difficult time and are thus not able to repay their loans which could increase the non-performing loan of banks which could result to the closure of hotels.
So it would be commendable if the banks can relieve them of loan repayment, reduce interest, and the government to provide assistance to the hospitality industry and failure to do so can prove catastrophic for the industry.

Capital: What do you expect from the government?
Aster: After doing the necessary assessments, the overall operation of the actors have written and submitted a letter to the National Bank of Ethiopia (NBE) that shows hotels are facing a national crisis. To this end we are yet to receive a response.
We have requested the government to avail loans, postpone loan repayment and tax due dates in order to keep the hotels afloat.
Commercial banks have understood the difficult situation that the hotel and tourism sector has found itself in. Likewise, the Addis Ababa City Tourism Bureau is also working to find a way to support us. Despite efforts by the association to contact the Governor of the National Bank, Yinager Dessie, our efforts have been unfruitful.
However, in my opinion I do believe that we will get a solution to our critical issues from the government sooner.