Hotels laid off 90 percent of staff in April Survey

Over 90 percent of hotel staff were laid off in April as hotels closed their doors as a result of the COVID-19 pandemic.

April’s Monetary Policy Committee (MPC) survey published last week by the Central Bank of Kenya (CBK) shows the painful stakes to both hotel owners and staff as the hospitality sector took a major hit from resulting virus-containment measures.

“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,” noted the survey.

“On average, respondents expected the hotels to remain closed for about 3-6 months, following Government’s efforts to contain the pandemic, and reopen some time during the second half of the year.”

Further, over 80 percent of hotels estimated a 90 percent loss in revenues over the first half of 2020.

Moreover, revenue gains made between January and March were in part lost to cancellations which triggered refunds and the subsidisation of costs to guests.

The hotels were further concerned that an extension to closures would erode on the industry’s peak experienced between July and October.

However, the recent initiatives by government to fast track the re-opening of the economy including the re-opening of hotels has restored some cautious optimism to the industry.

According to May’s MPC survey, 75 percent of hotels say they were in the process of reopening to include a move to comply with government operation pre-requisites.

19 percent of the surveyed hotels said they had reopened but had zero forward bookings.

Only five percent of hotels had forward bookings for the period running to August 2020.

“Respondents, however, pointed out that reopening with curfews and lockdowns in Nairobi and Mombasa, and with airports closed would not be cost- effective,” added the survey.

The registered forward bookings are a stark contrast to expectations registered in January when forward bookings were tabulated at an average high of 53.3 percent in April.