The Ghana Hotels Association says the high cost of hotel services is due to the economic situation in the country.
This comes on the back of a recent revelation by the association that some international tourists are, due to this circumstance, compelled to spend up to 60 percent of their budget on hotel accommodation.
In 2019 it was reported that Accra, was the second most expensive city in the world in terms of the property price to income ratio.
Beyond this, hotels in Ghana are considered quite high compared to their sub-regional counterparts.
But the hoteliers say they aren’t to blame.
Speaking to Citi Business News, President of the Association, Dr. Edward Ackah-Nyamike says the recent hike in fuel prices, increase in port duties, and the many taxes and levies hoteliers are faced with among others are contributors to the challenge.
“What I’m saying is that the economic environment has a huge impact on the rates that the hotels charge. The components of that economic environment are there for us. We all see it. Are we not all in this country where fuel prices have increased over the period? Are we not aware of electricity rates? Are we not aware of these several taxes that we pay?
Mr. Nyamike also raised concerns about the high cost of borrowing in the country and how it hampers business for players in the hospitality industry.
“Are we not aware of our lending rates? How does our lending rate compare with other countries? Look, hotels borrow from the market. We don’t have a special dispensation of lending rate to the industry. No, we don’t. We go to the open market so that 24% or more lending rate is what we all pay. So, when you go for that kind of money and you invest in your business, you have to pay back with that interest on it. And that must be factored into your whole rates.”
“And don’t forget that there’s that initial investment cost as well in the structures. The building itself. And some people think that hotel owners own their facilities, no, some of them rent. So they pay rent as well. Rent, taxes, and all those things. All this is must be factored into it.” He added.
He however called on the government to take urgent steps to protect the sector by addressing some of the challenges it is currently battling with.
“The sector Minister Dr. Mohammed Awal Commenting on this particular topic indicated that government must sit down with the hoteliers to see how best they can look at the hotel rates. It’s an admission of the fact that. The rates are dependent on factors that are also attributable to the government because a lot of the things I’ve mentioned here are things that are at the doorstep of the government and the hotels have their own part to play because there are some costs cutting measures that we can also put in place.”
“And once we put in that one the rest is something that it’s with the government. I mean, hotels do not determine lending rates, the foreign exchange rate, the tax levels, and all those things. So these are things that are at the doorstep of the government and we must do that comparative analysis before we jump to the fact that hotel rates are high.”
The tourism and hospitality industry has been one of the worse affected by the outbreak of the Covid-19 pandemic but with the removal of many of the restrictions, players in the sector are hopeful of returning to pre-covid-19 business levels.