TANZANIA: Value Added Tax, European Tourists Flee Tanzania

European tourists enjoy consumer protection second to none when it comes to their rights, and Tanzania is about to find out how they and their tour operators react to the folly of slapping VAT on tourism services.

The Tanzania's Finance Minister has introduced the tax in his budget speech, but the brunt of the dissent is now backfiring at Prof. Maghembe, the Minister for Natural Resources and Tourism, for not just abandoning his sector, but in a show of arrogance turning against the tourism industry, claiming tourists will have nowhere else to go.

Well, that notion is now being put firmly to rest as several European tour operators and travel agency associations have challenged the Tanzanian government to either lift the VAT or else they will rebook their clients to other African destinations.

Sources from within Tanzania are already counting their losses, as cancellations are pouring in thick and fast from tourists who are not ready to pay several hundred dollars extra for a visit to Tanzania.

Sources close to the main tour operator association, Tanzania Association of Tour Operators (TATO) in fact claim that their members have received way over a thousand cancellations and that the trend is accelerating for trips within the timeframe European tourists have to cancel their trips in case of price increases.

Kenya suffered a similar trend two years ago when the Kenyan government would not listen and an equally hapless tourism minister there also failed to stand up in cabinet and fight for the sector, offering similar lame excuses. The downturn in Kenya at the time accelerated, when into a time of down-turn the prices for safaris and beach vacations went up, before over the past six months a series of expensive but absolutely necessary financial incentives had to be launched to revive the tourism industry.

Kenya's tourism industry at the time was faced with the double whammy of anti-travel advisories and tax increases, leading key European tour operators to divert safari business at the time to Tanzania at the expense of Kenya while Zanzibar became en vogue in Europe while Mombasa's resorts remained empty.

Today, the boot has shifted to another foot as Tanzania is now faced with a similar exodus and the migration of business to neighboring Kenya, Uganda, Rwanda, and even as far as South Africa and Zimbabwe, where the cost of holidays is more affordable, in the case of South Africa aided by record low exchange rates of the rand versus major currencies.

Experience over the years tells that once a destination is in the bad books with European tour operators, it is very difficult to make up lost ground and only at a very substantial expense, as is seen presently in Kenya.

GAMBIA: Terror Attacks - Laico Atlantic Hotel Gambia Faces Closure, As EU And UN Freezes Assets Linked To The Gaddafis

In what can best be described as a tactical move to deceive the employees of the Laico Atlantic hotel about the imminent closure of the hotel by its owners, the Libyan General Manager of the hotel, Mr. Abdullah El Omurani, told the hotel staff that the hotel will be undergoing renovation works for a period of 8 months starting 1st December 2015 and informed everybody that the hotel will not be needing their services during this period anymore. In other words, they were effectively declaring them redundant.

What he did not inform them was the fact that most of the major European Tour Operators including Thomas cook and Corundum have advised all their traveling holiday makers not to use or be guests to any of the Libyan owned hotels operated by LAICO Hotels management. We have been reporting about this looming threat months ago and the meeting organized by the hotel’s General Manager this Thursday only lends credence to the gloomy picture facing the hotel for some time.

Whether asking the staff to stay at home for almost a year to carry out renovations at the hotel at this crucial time, when the tourist season is at its peak time is genuine or not, the truth is there have not been any major investments in the hotel to improve the dilapidated facilities which have been an issue with the Tourism Authorities for quite some time now. Thus forcing the GTA to revise down the hotel rating to a 3-star hotel.

The old carpets inside the hotel have not been changed for over seven years, the kitchen equipment are rusty and unfit for a hotel like Atlantic, there are cockroaches in the bedrooms, there are no flat screen TVs in the rooms and the swimming facilities have never been renovated since the hotel was bought by the Libyans.

While the hotel owners continue to owe the Government of Yahya Jammeh over D200 million for tax evasion and outstanding balance payment following the sale of the hotel in 1999, the current management have been busy transferring huge amount of foreign currencies from the hotel’s foreign-currency-denominated accounts at BSIC bank to overseas banks located in Dubai and Tunis.

Instead of using the limited money that the hotel is generating to service most of its debts and save the salaries of the desperate staff, the Libyans have been busy buying very expensive 4x4s from Dubai including the new Mercedes Benz that was the official vehicle of the former EU Charge D’Affaires who was forcefully asked to leave the country.

During the meeting with the staff, the General Manger disclosed that “all the Libyans hotels located around the world and managed by LAICO management groups have been asked by the EU and the United Nations to cease operations because of the current situation in Libya.”

With nowhere to turn to address their predicament, the 200 staff are now desperately looking for help from the government to rescue them and protect their jobs. There are three Libyans presently working at the hotel with each earning over $ 3,500 each per month when the average salary of the staff is less than D3, 000.00. Isn’t it time for the government to intervene and help protect the local jobs for the benefit of Gambians?

Atlantic hotel has a pivotal role in the history of tourism in the Gambia and it can only be preserved by this government that made the terrible mistake when making the sale of this historic hotel to none other than the late Gaddafi. Today most of the Libyan overseas investments made during the time of Ghadaffi cannot be properly accounted for.

The EU and others must have enough evidence to back up their claims. It is time to hear their call. Organizing a meeting at this very late in the day to tell the staff about the state of affairs of the hotel is just a ploy to cover up the unavoidable closure of Laico Atlantic hotel.