After seven years of an on-and-off process, hotels in Kampala have finally been classified as Uganda’s hospitality industry struggles to comply with world class standards for accommodation, conferencing and banqueting facilities.
Out of the 78 hotels that were assessed, 26 passed the test for classification and received stars on June 26, ranging from two to five stars. Kampala Serena Hotel, Kampala Sheraton Hotel and Munyonyo Commonwealth Resort were officially handed five-star status.
Uganda Tourism Board chief executive officer Stephen Asiimwe said only hotels within Kampala were assessed, and the agency was looking to carry on the classification process for hotels and accommodation facilities in other major towns such as Jinja, Entebbe, Mbarara and Gulu.
However, this comes amid an outcry from players that the hospitality industry is heavily taxed, and with occupancy in upcountry hotels remaining low, there are fears that growth and investment in the tourism sector could stagnate.
Among other taxes, the sector is subjected to hotel tax, local service tax, corporate tax, 18 per cent value added tax, in addition to remitting 10 per cent of an employee’s salary to the National Social Security Fund.
“Think of upcountry hotels that don’t get enough guests and yet have to keep paying all these taxes,” said Susan Muhwezi, the chairperson of the Uganda Hotel Owners Association.
At the end of 2014, there were over 3,000 registered hotels in the country under the industry body Uganda Hotel Owners Association, but the Uganda Tourism Board only regulates accommodation facilities that qualify as town hotels, vacation hotels, motels, lodges, eco-lodges, guest houses, cottages and serviced apartments.
The classification comes seven years after the exercise started. The assessment of the hotels was based on EAC accepted standards.
According to Tourism Minister Maria Mutagamba, the classification marks one of the first major milestones for the Ministry of Tourism, Wildlife and Antiquities since its separation four years ago from that of Trade and Industry.
The hotel industry is one component of the increasingly significant tourism sector in Uganda’s economy. In recent years, tourism has become Uganda’s number one foreign-exchange earner, overtaking coffee and diaspora remittances. Last year, tourism earned the country $1.4 billion.