Foreign-owned hotels change face of Gulu City

There has been a 23.3 percent rise in the number of hotels in Gulu City following the return of peace to Northern Uganda, a survey shows.

Analysis by this newspaper shows that in 2005, during the Lord Resistance Army insurgency, then Gulu Municipality had a total of 125 hotels concentrated in the heart of the town. As of October, the number stood at 534, according to a survey done by Gulu City council

Mr Nixon Komakech Atemo, the principal commercial officer for Gulu City, says most of the hotels are owned by foreigners.

“Between 2005 and 2010, we had 125 hotels within the then municipality. However, according to the survey we did in October 2022, there are 534 hotels in Gulu City and of these; 367 are owned by foreigners, majorly Eritreans, Ethiopians and Somalia,” Mr Komakech says.

Mr Komakech asserts that most of the foreign-owned hotels were rented out by the indigenous owners.

Some of the popular hotels that have since been rented out to foreign investors include; Abyssinia Bar and Lodge, Classic Ethiopia Lodge and Bar, KSP Hotel, JoJo Palace Annex, New Sun Set, New Florida Hotel, Hotel Mwoka and Zam Zam Hotel. Mr George Aligech Lapir, a businessman in Gulu City, says most businesses belonging to indigenous people collapsed due to loans and high fines slapped on them by Uganda Revenue Authority for failure to pay taxes.

Challenges

“The hotel business was booming during the war, and hoteliers in Gulu got a lot of money that inspired them to acquire huge loans from commercial banks, which they failed to pay and many buildings were sold off,” he says.

According to Mr Aligech, if the bank is demanding Shs60m and the hotel cannot raise the money, the best option is to rent the building to somebody who can give a lump sum money so that they can clear the loans and the house is safe.

He adds that the foreign investors have exhibited expertise in the hotel and hospitality business, outcompeting the indigenous ones.

“Some of them are coming with large capital and they can rent the building and first renovate it to become a high-end,” Mr Aligech asserts.

In October 2022, the UPDF 4th Division Commander, Brig Bonny Bamwiseki, ordered security in Gulu City to conduct an immediate vetting of all foreign nationals and non-residents operating in the city and arrest those without documents, citing insecurity threats.

However, Mr Komakech, says most of the foreign nationals operating hotel businesses in Gulu have work permits.

Efforts to speak to foreign hotel owners were futile as they turned down our interview requests.

But Mr Francis Mawa, the chairperson of Gulu City Hotel Owners Association, says most hotels owned by foreigners have failed to follow the security measures laid down by the association.

“Upon relying that their numbers outweigh us and they are the majority, they are not loyal to us now and usually don’t come for hoteliers meetings every time we call them,” Mr Mawa says.

[email protected]