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Monday, 1 April 2013

Is Government failure to regulate hotels turning them into brothels?

Government has threatened to shut down all hotels/lodges across the country that are operating below the required standards. Tourism Minister Sylvia Masebo says some hotels/lodges were not fit to operate because some lodges operated as brothels. She says brothel business was illegal in Zambia and should therefore be discouraged at all levels. She is urging lodge owners to ensure that their premises are well maintained and meet GRZ set standards.

This is a difficult industry to understand. It is chaotic. In 2007 GRZ introduced Tourism and Hospitality Act that supposedly gave GRZ power to deal with these problems. But two years later in 2009, Government announced that a new Hospitality Act was needed to enable the industry "to trade in a transparent manner" and deal with "the mushrooming guest houses that are used as brothels ". 

Sounds familiar? Well nothing was done because it was concluded that a new Act was not necessary. The problem is that we have poor enforcement by GRZ. The state of our hospitality industry is a shambles because GRZ finds it difficult to enforce its own standards. Part of the problem is corruption and regulatory capture. Another reason is simply that the number of lodges and hotels have outstripped government's ability to check their operations.

This is a huge problem for ordinary people because hospitality is what economists call an 'experience good'. You only know the value after your money has been spent. It is also partly a 'credence good' because sometime even after you have used a lodge you never know quite what you may have picked up! You pay the real cost without knowing! In short something needs to be done. The problem is much greater that brothels!

Some of course have suggested that any regulation should start with Parliament Motel which has had a reputation as a den of indecency. Matters which are beyond my power of verification. Over to you Ms Masebo on that one! 

Question: What needs to be done to improve standards? Interested to read your comments below

Copyright © Zambian Economist 2013

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