Tanzania government sticks to its fists over privatized state hotels

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The Tanzania government once again warned investors over a possible re-possession of poorly-performing hotels and lodges in northern Tanzania wildlife parks after owners failed to provide quality services and a breach of the signed agreement with the government.

Privatized tourist lodges and hotels in Tanzania are listed among business entities but which had failed to provide quality services to foreign and local tourists visiting northern Tanzania wildlife parks.

Deputy Minister for Natural Resources and Tourism Mr. Constantine Kanyasu had warned owners of hotels and lodges over poor service delivery, failure to hire local Tanzanians to the top managerial positions, and cheating on taxation remittance.

Kanyasu said that the once state-owned hotels have been operating below standards, this poor quality is driving away tourists visiting the key wildlife parks of Serengeti, Lake Manyara, and Ngorongoro where the lodges are located.

He said the government could revoke ownership licenses of all hotels that are found operating below standards.

“The government will then repossess its once-owned hotels to be shifted to other investors who are ready to manage them for the interest of promoting tourism,” he said.

The government had earlier issued a notice requiring the privatized hotel owners to submit their performance reports to the Treasury Register for assessment.

Tourist hotels and lodges under spotlight are all located in northern Tanzania where over 75 percent of all tourists visiting Tanzania are accommodated.

Four hotels in northern Tanzania were privatized in 2003 to Mauritius-based Gulf Africa Petroleum Oil Corporation Ltd. (Gapco) under Hotels and Lodges Limited, a subsidiary of Gapco which operates in northern Tanzania’s wildlife parks.

Key tourist hotels and lodges across Tanzania listed among them Lake Manyara Hotel (100 rooms), Ngorongoro Wildlife Lodge (78 rooms), Seronera Wildlife Lodge(75 rooms), and Lobo Wildlife Lodge (75 rooms), all located in northern Tanzania’s tourist parks of Lake Manyara, Ngorongoro, and the Serengeti.

Musoma Hotel in the Mara region is the other facility in the list located outside the parks. The government, through the Presidential Parastatal Sector Reform Commission (PSRC) in 2003 privatised the assets of the four hotels to Gapco subsidiary under the management of Hotels and Lodges Tanzania Limited.

Through the notice issued by the Treasury Registrar, the government had asked purchasers and outright owners of privatized hotels to submit  reports which would make the Registrar re-assess viability of their business and services.

Other reports needed are the average salary paid to the hotel employees  against the statutory minimum wage, other benefits provided over and above statutory requirements; Corporate Social Responsibility (CSR)  to local communities and last, the key factors that have contributed to the growth or failure of each listed entity.

The hotels and lodges were established by the government of Tanzania before their privatization in 2003.

Under such arrangements, the government of Tanzania plans to table a motion before the parliament to decide the fate of those hotels, pending submission of a performance report.

Other government owned hotels which  were privatized during the process between 2003 and 2010 are the Embassy Hotel and Kunduchi Beach Hotel in Dar es Salaam, Hotel 77in Arusha, New Mwanza Hotel on
the shores of Lake Victoria, New Savoy Hotel in Morogoro and Mafia Island Lodge in the Indian Ocean Island of Mafia.

Tourism is now the leading source of foreign currency as an export product, accounting for 25 per cent of total export earnings, the World Bank report said. The World Bank had indicated that tourism revenues for Tanzania could growth to $16 billion annually by 2025.

It is now Tanzania’s leading foreign currency earning sector and key economic sector. Tanzania earned $ 2.2 billion (Tshs 5 trillion) as of the year 2017 accrued from 1.3 million tourists who visited Tanzania.

Looking to attract three million tourists in the next two years, Tanzania has switched its marketing plans to focus at new emerging market sources in China, India, the Pacific Rim and South America. Tanzania is now targeting the Chinese tourists after launching tourism market campaigns in five key Chinese cities, aiming to attract Chinese business travellers and tourists.

Tourism is Tanzania’s leading foreign exchange source with 25 percent in Tanzania’s Gross Domestic Product(GDP).

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