Namibia: Lodge to Slash Wages Due to COVID-19

24 March 2020

The Namibian hospitality industry, particularly lodges, are highly vulnerable and will be hard hit by the outbreak of the coronavirus pandemic after Namibia has recorded the third case of Covid-19 last week. Many lodges are trying to reduce and cut costs as the industry faces cancellations from foreign tourists who are the life-blood of this key sector of the economy.

One of the employees of the Ai Aiba - The Rock Painting Lodge, located in Uigaran in the Erongo region, who asked for anonymity stated that their salaries will be cut in half, starting next month, and there were unconfirmed reports that the lodge will retrench at least 15 employees.

However, Immanuel Vapileni, an assistant manager at the lodge, said no retrenchment is happening in the lodge, but only the cut of workers' salaries due to Covid-19 and the increase in cancellations.

"I have heard that the staff is confused, and generally employees that are on leave are getting wrong information. The management took a decision not to retrench but to minimise working days," stated Vapileni.

Immanuel said the lodge is only trying to cut costs and in the process, management decided to divide the staff into two groups (shifts) and cut their salary. The group is to work for two weeks until further notice. He said the company does not want to lose their staff - that is why it decided to rotate staff.

He urged the staff to be on standby while on two weeks' leave, as they might be called in depending on the visits the place is to receive. Vapileni highlighted that the cut of pay will only start from next month and is not sure of the percentage, as they are still waiting from the general manager.

Coronavirus affects the tourism industry because of the restriction of people's movements. The country has seen a significant drop in tourists in trying to cut down the spread of the virus.

"To keep the lodge going, management has decided that the lodge needs its staff to take care of its machinery. After closing down, the lodge will experience more costs of taking care of rusts if we decide to close down - but in simple terms, we are fully operational. Talking now, we are somehow fully booked for locals, so we are up and running," he said.

Vapileni highlighted that they were shocked at first and the lodge did not receive visits the first week when it got the news, as people were afraid of the virus. But the lodge got prepared, availing the staff with all that was needed to take care of their health.

Speaking to New Era Inside Business, the Namibian Tourism Board chief executive officer Digu //Naobeb said the outbreak of the virus has negatively affected the industry. He said most lodges are affected, as they have to make refunds to tourists who had paid bookings with respective places and are likely to face some financial challenges.

"Most lodges are busy with refunds, as tourists pay in advance; unfortunately, because of the virus, theycannot come through. Lodges are now likely to face cash flow problems. Debt servicing to commercials is a thorn in the meat, knowing that everyday business needs money," stated //Naobeb.

//Naobeb said it is not only the lodges that are affected but business people who sell souvenirs to tourists lost customers and there is no income to sustain their livelihoods. He said some conservancies have arrangements with lodges and they receive levies from them, so they are also affected and will not have funds for community activities at large.

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