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Hoteliers and pub owners forced to pay for dead investments

NEWS
By Dominic Omondi | April 22nd 2020
Benson Munuve.

Before Covid-19 struck, the Swahili would have described Benson Munuve, a proprietor of three nightclubs, a city cockerel.

He used to run the city, now he is running away from it.

Today, Munuve is a cockerel whose crow can only be heard upcountry. The coronavirus pandemic has transformed him from a city businessman into a country farmer.

So when we caught up with him for an interview on phone, the sound of a cock crowing could be heard in the background, betraying his newfound rural life.

Grow crops

“I am upcountry, and it has rained cats and dogs,” said the hotelier-turned-farmer, happy that he can grow some crops.

His family is in Nairobi, and he jokingly says that after shutting down the three joints, he had to flee the country’s capital city. The boredom in Nairobi, he says, was just terrifying.

“Can you imagine me waking up in the morning, I take tea, my wife gets into her laptop and sends her information to the office; the kid is busy reading online and you are all alone there like a kangaroo,” says Munuve.

One of his clubs, the oldest, is in Nairobi County on Thika Road. The other is in Machakos County while the newest one is in his home county of Kitui. Combined, the three clubs used to earn him approximately Sh4 million in a month. Not anymore.

If anything, these investments are only cashing out. Despite closure of the nightclubs, he still pays some overhead costs including rent, repairs, water and electricity, which add up to Sh150,000.

Landlords have particularly been a thorn in the flesh for Munuve.

“We are telling them (landlords) let us sit and negotiate. This is a natural calamity which has happened. Why don’t we agree on a modality on how I will pay you when we open even if the rent will be a million shillings? But some are adamant. They don’t want to hear that. Instead, they insist they want their money and you are not making even a cent,” Munuve says. Some real estate developers, however, have sought to give their tenants relief. Fusion Capital, a real estate development company, has waived 30 per cent for its tenants on one of its commercial properties.

Munuve sent all his 25 employees home, but was forced to retain a security guard on each of the premises to keep an eye on his stock, fridges, television sets, and music systems.

When he parted with his employees last month, offering each an advance salary, he was sure this was going to be temporary. Then he thought they would be back to work in less than 21 days. That never came to pass. And now he does not know how things will pan out. No one knows, not even the government.

As a measure to stop the spread of the deadly viral disease, the government ordered the closure of all hotels, pubs, and nightclubs.

As a result, the entire hospitality industry has shut down. Hotels have bolted their doors. Hitherto noisy nightclubs are eerily silent. Millions of waiters and bar attendants are out of work.  

“Can you imagine those staff who are at home. There is no coin you are getting. And the owners want rent,” wonders Munuve.

The overhead costs are ferociously eating into his savings, and he doesn’t know what to do if things remain as they are for the next two months.

Munuve’s story is part of the bigger tragic story of the hospitality industry, which employs close to 100,000 people, according to official figures. The industry, which includes sale of food, beverages, and accommodation, is worth over Sh66 billion.

Dominic Machira is an assistant manager at Heritage Hotels. When the hotel shut down, most of the 45 employees who are on permanent terms were given their March salary and told to return when the government will relax the mitigation measures.

Mr Machira, who hails from Kakamega County where his family is, wanted to go home but now can’t. The landlord compelled them to pay the March rent. But he doesn’t know how he will pay the one for April.

The worst thing about this pandemic is uncertainty. No one really knows when it will come to an end.

Wines and spirits

Both Munuve and Machira wish they could have been offered some space to continue eking out a living, just like the wines and spirits have been allowed to do. 

“Because now they have allowed wines and spirit stores, why are they not allowing us to sell only for take-aways,” wonders Munuve.

Major players in the hospitality industry have suspended their businesses.

Tourism Cabinet Secretary Najib Balala had announced that the government had put together a war-chest of about Sh5 billion to help resuscitate the tourism sector, a major foreign exchange earner for Kenya.

However, in the mini-budget tabled in Parliament last week, the government allocated only Sh2 billion for the revival of the industry that has been characterised by massive lay-offs.

There are fears that the money might not reach thousands of small businesses in the hotel industry such as Munuve’s, which do not have powerful lobby groups as the big hotels.  

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