Players in the hospitality industry are skeptical of Cabinet’s decision to compel hotels in the resort town of Victoria Falls to pay their electricity bills in foreign currency at a time the country had just deregulated usage of foreign currency for local transactions, citing the move will compound operational costs.
Already, the sector is ceding 20 percent of its foreign currency generated to the Central Bank and the latest development is expected to further diminish foreign earnings for hoteliers in Victoria Falls.
However industry leaders say the move could be a “win-win” affair, if Government also allows for hotels in the province to charge local tourists in foreign currency.
“What needs to be done is to also let hotels be allowed to receipt in foreign currency for both locals and foreigners. Also for the tourism capital, Victoria falls; let it be exempted from load shedding after being compelled to pay electricity in foreign currency,” Hospital Association of Zimbabwe, president Innocent Manyera told 263Chat Business in an interview.
Cabinet yesterday endorsed the decision to let hotels in Victoria Falls pay their electricity bills in foreign currency in a bid to capacitate the power utility company, ZESA to generate sufficient foreign reserves to import power.
But for players in the sector, scrapping the 80 percent foreign currency retention scheme will capacitate hoteliers meet the foreign currency bills.
“We feel the operators should retain 100 percent of foreign currency earnings to cushion the bills and imports of other commodities that are not available locally. So it can be a welcome development if load shedding exempted to Victoria Falls since they will be paying in foreign currency and tourists can enjoy seamless experience without power interruptions,” added Manyera.
The sector has been greatly affected by the ongoing power cuts which have left many operators opting for diesel energy to pump generators, a case that has augmented operational costs.
“Major challenges have been electricity as well as shortages of fuel to enable backup generators. The sector got potential but without reliable sources of power business is held back. We need power for lighting, kitchen production, laundry, pumping water among other things, so without it operations have been a thorn,” Manyera said.
However Government has called business to consider solar and bio gas as alternative sources of energy as a stop gap measure to lessen demand for electricity from the national grid.