OPINION: Bonding Scheme for Uganda Tour Operators

Elephants on the nile

By Baluku Geoffrey

Tourists who make bookings with a Ugandan tour Operators will soon be compensated should the company used by tourists on a confirmed tour go into liquidation before services are delivered.

The Association of Uganda Tour Operators (AUTO) is in search of a firm that will help build confidence of tourists visiting Uganda. Following in the foot steps of South Africa and our immediate neighbours Kenya the Tour Operators are planning on working with a reputable insurance firm with a view of agreeing on a bond scheme policy.

As part of the terms of this Policy both local and international tourists booked by members of the AUTO who get into financial problems will be compensated. The bond scheme will ensure tourists and overseas agents do not lose their money hence build confidence in Uganda’s Tourism Sector.

The bonding scheme is a type of financial guarantee that covers travelers against possible losses of their advance or full payments held by all AUTO members facing involuntary liquidation.

A few weeks back, the Ugandan Minister of Finance proposed an 18% VAT increase on upcountry accommodation and advised that it was supposed to take effect on 1st July 2013.

Elephants on the nile
Elephants on the Nile

The impact of this to tour operators is immense as they will incur losses estimated between 3% to 9% which is likely to lead to closure and bankruptcy of the tour operators in Uganda , therefore loss of jobs and devastation for the tourism sector of this country.

Professionally it is not possible for tour operators to ask our confirmed clients to pay an increase of 18% on accommodation rates, as most of our tours were confirmed way back, therefore we will simply have no money to pay this increase unless all of us opt to voluntary kill our businesses. With a bonding scheme all these eventualities would have been mitigated.

Our request to government is that the decision to effect this payment be halted for more consultations to be made as we can not pay money we do not have.

It should be noted that tourist inflow numbers are continuing to grow in Uganda. Last year we recorded 1,125,000 tourist arrivals. In a country like ours where the marketing budget is meager, the bonding scheme will go a long way in building Uganda’s Tourism Profile.

The Association of Uganda Tour Operators in intends to work with our local partners to finance the scheme. With a membership of 111 paid up members and the number expected to grow, each company will be expected to contribute a certain agreed upon amount of money annually. Under the scheme, if a member goes into insolvency prior to rendering contracted services, the received claim will be looked into and a refund made. This will apply when a tour company based in Uganda is paid for services which they fail to deliver on or goes under.

However, it is important to note that scheme does not reimburse non-performance by tour companies as this falls under a professional liability scheme which will also be worked out soon.


The Writer is Secretary to the Board Association of Uganda Tour Operators & Owner Balukus Uganda Travel Guide / Portal




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