Hotels to cut staff over rising cost of doing business

Business News of Saturday, 28 February 2015

Source: Tv3network.com

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The Ghana Hotels Association says industry players may be forced to cut down workforce due to a high cost in doing business. The Association says staff downsizing may be the only option if the situation doesn’t improve.

The President of the Ghana Hotels industry, Mr. Herbert Acquaye said this at the opening ceremony of the 8th Biennial General conference in Tamale in the Northern Region on Wednesday.

The conference was which was under the theme, “Tourism Development Fund-Opportunities and challenges” was to launch one percent levy on the hospitality industry to boost the tourism sector of the country.

He noted that that the business is no longer attractive to new investors attributing it to high bank borrowing rate at 34 percent whiles inflation is hovering around 16 percent. Mr. Acquaye said “to enable us to survive such turbulence, we are forced to increase our rates and prices turning Ghana into a high cost destination.”

He said there was a drop of “occupancy in the country” in 2014 as against 2013 as a result or restricted overseas travel by tourists and cancellation of international conferences.

On the current instability of electricity in the country, he called on government to remove tariffs on imported generators for the industry.

The President of the Hotel Industry appealed to government to use part of the fund in to tourism research and establishment of a Tourism Information Management, adding that they are very important areas if our tourism Satellite Account will be useful”.

The Acting Deputy Executive of Director of Finance and Administration of the Ghana Tourism Authority, Mr. Sampson Donkoh said the Tourism Industry in the country which was not considered as part of National Accounting System has made a significant strides to become one of the leading sectors and major foreign exchange earner.

He attributed the high income in the industry to substantial investment in accommodation, catering travel and tour, car rental and craft among other things.

Mr. Donkoh said this necessitated the establishment of the Ghana Tourism Authority and the Tourism Development Fund aimed at providing funding for tourism and tourism-related projects and programs.

He identified some areas that the funds will be used which include, marketing and promotion; capacity building, market research and development of infrastructure and Tourism Education and Training.

Mr. Donkoh lamented that the one percent of revenue paid at designated banks indicated that majority of the accommodation and catering facilities registered and certified to collect the levy “are either not doing so or they are collecting but not paying to the Fund.

He said Monitoring and Evaluation teams have been trained and cautioned that “sooner than later the recalcitrant owners of accommodation and catering enterprises who are violating the Tourism Regulation, L.I2185 will be brought to book and the requisite penalties and sanctions will be imposed accordingly.”

The Paramount Chief of Sagnarigu, a suburb of Tamale, Ambassador Na Abdulai Yakubu, who chaired the function, said “unless tourism establishments register and honor their commitments honestly, the Fund “cannot be sustained to meet high expectation.”

He said “government is already facing dire problems with huge budget deficit much may not be expected in terms of allocation.” Na Yakubu cautioned the Ghana Tourism Authority not to be tempted to consider the Fund as supplementary source of budgetary support for its own operations.

The Manger of Picorna Hotel, Mrs. Wiehemena Aklako who spoke to Tv3 complained about the cost of water and electricity having a negative effect on accommodation in the hotels pointing out tat the prepaid meters seem to be consuming more current.

On catering services, she said most visitors prefer to patronize road side foods than those prepared at hotels, noting this was affecting their revenue.

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