High taxes, water shortages push up hotel operating costs — Hotels Association

Hotel operators are warning of growing pressure on the hospitality industry as rising taxes, utility bills and other operational expenses make it increasingly difficult to keep accommodation costs affordable.

The situation is particularly challenging in parts of the Central Region, where some hotels in Elmina have reportedly had to rely on water tankers after experiencing prolonged interruptions in their regular water supply.

The additional cost of securing water, according to the Ghana Hotels Association, is adding to an already difficult operating environment, with hotels having to provide water for rooms and facilities such as swimming pools from alternative sources.

President of the Ghana Hotels Association, Victor Minta, said the situation in Elmina had persisted for nearly three months, forcing hotels to spend heavily on tanker services.

“Currently, the cost of business is very high, such that in the Central Region, in Elmina specifically, for nearly three months, there’s been no water flowing through the taps,” he said.

Mr Minta also raised concerns about the tax burden on hotels, explaining that a sizeable share of revenue from room sales is absorbed by taxes before operators meet their other business expenses.

“Every hotel room you sell at approximately 100 cedis, about 20 percent is taxes. So even you have about 80 cedis left to cater for the cost of actually doing business,” he said.

Despite the cost pressures, the association says hotels are preparing promotional offers ahead of the festive season in an effort to attract more guests and encourage longer stays.

Proposed packages include offers where visitors who book several nights receive an additional night at no extra cost.

“We’re looking at how to provide promotions that provide maybe three or four nights and the fifth night free, that kind of thing, to help encourage more people to travel, to escape and to rejuvenate,” Mr Minta said.

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DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.