BULAWAYO — More than 80 lodges operating here have shut down since 2009 due to viability challenges.
The closure of the lodges has resulted in 400 workers losing jobs.
Many of the lodges are situated in suburbs and operate under Statutory Instrument 216 of 1994, which allows non-residential use of premises in residential areas.
The Statutory Instrument was enacted to support entrepreneurship through the establishment of lodges, wedding venues and crèches that then pay levies to local authorities.
According to council, a total of 85 lodges have surrendered their licences since 2009, rendering 425 employees jobless.
A study commissioned by the city fathers revealed that lodge operators were not making any profits, with 88 percent of them revealing that their operating expenses were higher than their revenues.
“They (lodge operators) indicated that they had to subsidise the operations from other sources of income like personal funds and money from other businesses,” said the council report.
“They highlighted that April was their only busiest month due to the annual Zimbabwe International Trade Fair.”
The expenses incurred by lodge operators include wages, motor vehicle expenses, hospitality levy, cleaning, repairs and monthly television licences.
As a way to circumvent losses, the report said lodge operators still in business had requested the local authority to consider reducing some of its levies and to allow lodge permits to accommodate other uses such as coffee shops, conferencing and wedding venues in order to boost income.
“…It is therefore recommended that all levies being charged to users under non-residential use in residential areas under the use groups, as specified in the Statutory Instrument 216 of 1994, be charged at 10 percent of the rates of the property or US$10, whichever is higher, as the idea is not to make money but to allow businesses to be able to meet the spirit of the Statutory Instrument, which is to encourage the spirit of entrepreneurship,” a part of the report read.
Council has also recommended the scrapping of the US$80 building levy for lodges operating within residential areas, while also allowing additional uses for the same lodges.
