In a significant development, hotels across Ethiopia have restarted accepting full payment in US dollars from foreign passport holders for the services they provide.
This move comes after the National Bank of Ethiopia (NBE) has reinstituted a directive that had been in place previously, but had fallen by the wayside in recent years due to lax enforcement.
Aster Solomon, the president of the Addis Ababa Hotels Association, explained to Capital that the directive allowing hotels to collect service fees in US dollars from foreign nationals has been on the books for years. However, the lack of stringent control by the authorities had led to a loosening of the implementation.
“The directive was already in place at the legal level, but the control was low, so that foreign nationals could only pay for the services used by the hotels where they were staying,” Aster stated.
This shift occurred as the gap between the black market exchange rate and the official rate widened, leading foreign visitors to make payments in the local Ethiopian birr currency rather than US dollars.
“The majority of hotels receive service fees in dollars under a pre-issued license with the National Bank, and the answer is in birr, but in the process its implementation has become looser,” Aster added.
The government has now moved to tighten the controls once again, compelling hotels to accept full payments from foreign nationals in US dollars only. This, according to Aster, is an opportunity for the country to benefit from the inflow of foreign currency.
“This re-tightening of controls is for the benefit of hotels and not for the benefit of the country, adding that it is an opportunity to benefit the country in terms of obtaining foreign currency,” she emphasized.
The move is also seen as an effort to encourage more diaspora arrivals from abroad to Ethiopia, as the government has reduced the number of transactions allowed in dollars at hotels.
With the NBE’s renewed enforcement of the directive, hotels across Ethiopia have begun implementing the same, ensuring foreign guests pay the complete service fees in US dollars once again.
