After first attempt to save Tunisia’s hotels, government tries again

The Court’s review and calculations demonstrate how inconsistent criteria for PMNH hotels, incoherent deadlines, incomplete diagnostic evaluations, and poorly distributed funding resource represented pitfalls in program enrollment, financing and implementation. Of the country’s 848 hotels (in 2008), 119 were accepted into the program. The French Development Agency (AFD) financed the project, disbursing a 1 million euro grant to the Tourism Renovation Office (BMNH) in charge of managing the program, and earmarking a 50 million euro credit line to the Ministry of Tourism. With this funding, each enrolled hotel had the right to a subsidy of up to 150,000 dinars, plus access to bona fide credit lines.

In 2014, the AFD withheld an installment of 506 thousand dinars the program was launched, investments totaled 271,897 million dinars, although the Court of Auditors estimates that only 37,83% of the program had been realized. By 2015, no more than 17 out of 119 hotel establishments had come close to completing (more than 80%) the program. 29 hotels had benefitted from access to credit lines, 11 of which had absorbed 69% of resources available to that end. A mere 6,4% of funding had been put towards non-material improvements, in spite of program and contract specifications to « give priority to non-material aspects » such as service training and marketing. By 2016, notes the report, a total of 348,019 million dinars had been spent on the Renovation Program between State subsidies, AFD funding, and credit lines.

Slow-moving program, quickly-changing context

« It’s a failure », says Mouna Ben Halima, Under Secretary General of the Tunisian Federation of Hotels (FTH). She explains that the Ministry of Tourism’s efforts to modernize the sector were based on the success of a similar program undertaken by Ministry of Industry in 1995. But where investments in infrastructure and new technologies went a long way in improving the competitiveness of businesses, the same material investments are not what those in the tourism sector are demanding. « We need service training—soft skills, hospitality, professionalism, languages, communication… », explains Ben Halima, who points out that out of some 800 hotels, only about 50 have websites.

A hotel owner herself, Ben Halima enrolled in the PMNH between 2012 and 2013. She has yet to be reimbursed for the second half of renovation work carried out under the program. « Me and other hotel owners I’ve talked to, we didn’t enroll in the program for the subsidy », she tells us. « There are two parts to the program: we have the right to a subsidy disbursed in two installments for a total of 150 thousand dinars per hotel. But there’s no logic to this—this is nothing for hotel renovation, which costs between 15-25 million dinars ». The subsidy is enough for one upgrade project, like kitchen renovation.

When we complete 50% of the work, we submit the invoices and are reimbursed. After the last 50%, we submit the remaining invoices to free up the second installment…only then you learn that there’s no funding.

How to renovate a renovation program?

Tedious diagnostic studies, prolonged response times, modest subsidies with no guaranteed disbursement dates—why would hotel operators even bother? « Access to credits », Ben Halima responds, indicating that the program had enabled her to secure a low-interest, 15-year banking loan. Otherwise, she notes, there are no long-term loan options available to hotels in Tunisia. Indeed, for the country’s debt-burdened tourism sector—120 out of 800 hotel establishments are unable to settle their debts, an estimated 4 billion dinars nationally—the prospect of low-interest, long-term financing is worth jumping threw a few hoops.

Can hotels and banks save tourism in Tunisia?

12/04/2017

Officially, the PMNH was set to end last year. The AFD confirms that its support for the program was completed in 2013. Nonetheless, the Court of Auditors report includes a series of recommendations to streamline the enrollment process, ensure that investments go where most needed, and promote better execution of project objectives. Recommendations for an improved PMNH, or future renovation efforts in the sector?

Nawaat contacted the BMNH, recently appointed a new director, Zoubaier Jebabli, who confirmed that the PMNH will continue, albeit in a new form. According to the Ministry, « the PMNH steering committee decided to make adjustments to the current PMNH during the transition period towards a profoundly revised PMNH ». Recognizing the « financial fragility of hotel establishments », the Ministry promises that the new program will « prioritize awareness-raising mechanisms, technical assistance, and support, rather than strictly financial aid ». This will be a significant improvement from the first PMNH, so long as future actions to renovate the tourism sector prove as loud and ambitious as words.