Economy

Ghana Hotels Association desperate for government intervention

The Ghana Hotels Association (GHA), on Wednesday, appealed to the government to put in place specific industry-support measures to enable the Association to revive collapsing hotels from the negative effects of the Covid-19 pandemic.

The appeal followed the drastic decline in the operations of hotels, especially occupancy rates since the nation recorded her first cases of the pandemic in March.    

The President of the Association, Dr Edward Ackah-Nyamike, at a news conference organised by the Association on the topic: “Six Months into Covid-19 Pandemic: Overview of Government’s Support to the Hotel Sector”, said the hotel industry was one of the worst hit businesses in the wake of the respiratory disease.

He said the measures put in place by the government to contain the pandemic, such as the closure of borders including the Kotoka International Airport, ban on social gatherings like conferences, events and restaurants, had a serious impact on economic activities with which hotels were no exception.

The hotel industry also faced a number of impacts such as cancellation of all bookings for individuals, groups and conferences, complete shutdown of some hotels accompanied with challenges of maintenance of facilities, he said, adding that, at least 64 per cent of hotels closed down at one point or the other from March 2020 till date.

Other impacts were a drastic reduction in occupancy rates to below 20 per cent for hotels that remained open, and temporary and permanent lay-off of some hotel workers, which saw more than half of hotels in Ghana permanently laying off workers running into thousands, conservatively over 40,000.

Challenges with payment of salaries, pension, contracted loans, taxes, credit facilities to vendors and suppliers, utility bills especially for water and electricity and challenges with payment of rents for hotels who operate on rented premises were other effects of Covid-19, Dr Ackah-Nyamike said.

Even though the hotel industry met with the President over his announcement to foot the water bill of all Ghanaians, the business community was later exempted.

According to an explanation from the Minister of Sanitation and Water Resources, Mrs Cecillia Abena Dapaah, and the Ghana Water Company, Dr. Ackah-Nyamike said the industry for the six-month period, still received their water and electricity bills to make payments.

The GHA President said it was sad to note that 4 months after the online application for the GH¢1 billion soft loan allotted by the government to be disbursed by the National Board for Small Scale Industries (NBSSI) as part of measures to reduce the effect of Covid-19 on businesses, only 2 per cent of members of the GHA had benefitted from the disbursement.

The Association appealed to government for a refund of water bills paid by hotels for the months of April to September 2020, introduce the 50 per cent discount to hotels for the last quarter of the year, and impress upon the NBSSI to speed up the loan disbursement process.

It also called on government to impress upon the Ministry of Tourism, Arts and Culture to speed up the Ghana Tourism Development Project Grant, issue further and better particulars on the GH¢3 billion grant facility and how up-market hotels could access it.

The GHA also appealed to government to suspend the payment of VAT, National Health Insurance Levy and GETFund by hotels for the last quarter of the year or put all hospitality enterprises on the 3 per cent VAT Rate, for Output Tax.

It also called for an extension to the December 31, 2020 deadline on the remission of penalties on principal debts to taxpayers to redeem outstanding debts owed the Ghana Revenue Authority.

The Association also implored the government to direct all Metropolitan, Municipal and District Assemblies and hotel regulatory bodies to extend the deadline for payment of regulatory and license fees, including property rates to December 31, 2020.