Identifier
Created
Classification
Origin
08ASMARA359
2008-07-21 07:31:00
CONFIDENTIAL
Embassy Asmara
Cable title:  

NO WAY TO RUN A HOTEL IN ERITREA

Tags:  ECON BEXP ER 
pdf how-to read a cable
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ZNY CCCCC ZZH
R 210731Z JUL 08
FM AMEMBASSY ASMARA
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INFO RUCNIAD/IGAD COLLECTIVE
RUEAIIA/CIA WASHINGTON DC
RUEPADJ/CJTF-HOA J2X CAMP LEMONIER DJ
RUEKDIA/DIA WASHDC
RHMFISS/HQ USAFRICOM STUTTGART GE
RHEHNSC/NSC WASHDC
RHRMDAB/COMUSNAVCENT
RUEHC/SECSTATE WASHDC 9791
RHMFISS/CDR USCENTCOM MACDILL AFB FL
RUMICEA/JICCENT MACDILL AFB FL
C O N F I D E N T I A L SECTION 01 OF 02 ASMARA 000359 

SIPDIS

DEPARTMENT FOR AF/E
LONDON AND PARIS FOR AFRICA WATCHERS

E.O. 12958: DECL: 07/20/2018
TAGS: ECON BEXP ER
SUBJECT: NO WAY TO RUN A HOTEL IN ERITREA

Classified By: AMBASSADOR RONALD K. MCMULLEN FOR REASON 1.4 (d)

C O N F I D E N T I A L SECTION 01 OF 02 ASMARA 000359

SIPDIS

DEPARTMENT FOR AF/E
LONDON AND PARIS FOR AFRICA WATCHERS

E.O. 12958: DECL: 07/20/2018
TAGS: ECON BEXP ER
SUBJECT: NO WAY TO RUN A HOTEL IN ERITREA

Classified By: AMBASSADOR RONALD K. MCMULLEN FOR REASON 1.4 (d)


1. (C) SUMMARY. Asmara's Intercontinental Hotel is often
seen as a beacon of modernity, efficiency, and comfort in an
otherwise bleak Eritrean landscape. However, the Intercon's
newly arrived expatriate manager (protect),in a July 17
meeting with the ambassador and A/DCM, painted a dire picture
of his ability to maintain minimal hotel standards amid
shortages of nearly everything, including customers. End
Summary.


2. (C) TOO FEW CUSTOMERS, TOO MANY STAFF
--------------

Eritrea's premier hotel has been running at 17% occupancy
recently, its manager stated, adding that for the first time
in his 22 years of managing hotels, his hotel had absolutely
no new arrivals for the day (July 17). He said the
Intercontinental chain's ten-year management contract of this
government-owned hotel runs until 2014, but the manager said
he would be doing a careful assessment of whether customers
could get a true "Intercontinental experience" in Asmara. If
not, he said the company may reconsider its contract. The
manager lamented the low quality and high numbers of hotel
staff. He said he plans to fire 175 of the hotel's 250
employees, if permitted. (COMMENT: Post is aware that a
number of the hotel staff are National Service conscripts,
young people paid about a dollar a day for this open-ended
obligatory government service. END COMMENT.)


3. (C) WIDESPREAD SCARCITIES
--------------

The manager said the hotel and its "outlets" (i.e., in-house
restaurants, bakery, shops, nightclub, and function rooms)
lacked numerous basic items, such as butter, milk, chocolate,
spare parts, and replacement tiles, carpet, tires, and
furniture. He said, "Yesterday we didn't have any milk, so I
sent someone out to milk three cows." He said the hotel had
a working generator but only enough diesel fuel to operate it
for three days in the event of prolonged electricity cuts.
When he asks his government point of contact in the Ministry
of Tourism for consent to import vital items, the answer is
"we must ask permission," with long delays turning into
negative responses. He said the Intercon had recently been
able to import a container of beer, which is generally
unavailable in Eritrea. As the bandwidth of the
government-owned Internet service provider was inadequate for
modern travelers, he intends to seek permission to establish
a hotel-owned satellite Internet service.


4. (C) ANY PROSPECTS FOR IMPROVEMENT?
--------------

The manager sought an embassy assessment of any potential
turn-around of the country's glide-path to economic disaster.
He said he had met with leading business enterprises and
only one factory (an Italian shirt-making company) was very
active. However, due to inefficient shipping routes, it was
forced to export the bulk of its shirts by air, which ate up
most of the company's profit margin. The Intercon's manager
was very skeptical that current government policies would
permit the economy to pull itself out of the doldrums.
Emboffs said many Eritreans look to late 2010, when the
Canadian and Australian gold mines are expected to come on
line, as the best hope for an infusion of liquidity into the
deteriorating economy.


5. (C) DEPRESSED AND DEPRESSING MASSAWA
--------------

The manager described his impressions of Massawa after a
recent short visit. Massawa is often considered the crown
jewel of Eritrea's tourism potential. He said he came away
depressed, saying "Massewa offers a tiny port, lots of
shot-up buildings still full of bullet holes, two absolutely
horrible hotels, no fishing industry, no tourism
infrastructure - why would anybody want to go there?" The
reconstructed Italian-era railroad between Asmara and Massena
is scenic but terribly unsafe, according to the manager.

ASMARA 00000359 002 OF 002




6. (C) COMMENT:
--------------

Just as "fish can't see water," perhaps Eritreans and even
some resident expatriate personnel have become inured to
widespread shortages, severe economic mismanagement, and the
lack of potential (apart from mining) in the business,
industrial, and tourism sectors. The new Intercontinental
manager's shock at what he has found at the hotel, in Asmara,
and in Eritrea as a whole is a bracing reminder that what
passes for normalcy in Eritrea is unacceptable by
international business standards. End Comment.

MCMULLEN