Hospitality industry appeals for bailout

Operators in the hospitality industry have appealed for government intervention to help them survive the effects of the coronavirus disease (COVID-19) on their businesses.

With the closure of some international airports, the lockdown of some countries and the ban on social gatherings, patronage of hospitality facilities, particularly hotels and car rental services in the country, has been badly affected and operators are reeling under the impact of the measures.

While the Car Rental Association of Ghana (CRAG) has appealed to the government to intervene by asking banks to give its members a three-month moratorium on loans and vehicle assets finance, the Ghana Hotels Association (GHA) has also asked for some bailout to avoid job losses.

Concerns

The President of the CRAG, Mr Seth Yeboah Ocran, said: “Our business solely relies on the movement of people, both domestically and internationally, but now that there is a ban on public gatherings and there is social (physical) distancing, most of our big hotels are empty, while some hotels have been designated for suspected carriers of the virus.

“While all these are going on, most of us have taken loans and also entered into vehicle assets finance, and since there is a freeze on almost everything, it may be difficult for us to pay these loans,” he said.

He explained that the association was entreating the government to get the banks to freeze its members’ loans and also not charge penalties for their inability to pay.

“After the three months, if everything is normal, then we start paying,” he said, adding that there should also be a three-month extension of the loan repayment period.

He said currently the industry had been compelled to send away about 80 per cent of its workers because business had come to a standstill.

“Under the labour laws, if we ask them to go home, it means we still have to pay them, but we do not have money, and that is why we are forced to lay them off,” Mr Ocran said.

Hotel operators

Many hotel operators the Daily Graphic spoke to said their facilities were operating below 10 per cent of their capacities.

According to the President of the GHA, Dr Edward Nyameke Jnr, hotel occupancy rate was projected to further decline to between two and 12 per cent in April, as many more affected countries imposed travel bans.

As a result, he appealed to the government to support the members by freezing the payment of Value Added Tax (VAT) and also suspend the one per cent tourism levy on hotels, adding that they should be given interest-free loans.

The Sales and Marketing Manager of the Accra City Hotel, Mr Yaw Mamphey, also said the entire hospitality industry was on a melt down following the outbreak of the CONVID-19.

"We know that a lot of hotels will be shut down in the coming weeks because the entire tourism industry has been affected and globally packages are being discussed to support the industry," he said.

For his part, the General Manager of the Seraphina Hotel at Achimota, Mr Mark Duah, said the sector had been hit because its customers were mainly foreign travellers.

"We started to feel the shocks earlier when a travel ban had not even been imposed in the country. This is because elsewhere people were being advised not to travel, and most of our clients are tourists who come here and stay over a period," he said.

He said already some workers had been laid off till the situation was normalised, adding that a shutdown was inevitable should the situation persist.

“Already, our restaurant staff have been made to go home for now, as there is no patronage. If it persists, we may have to go off for a while until the situation returns to normal,” Mr Duah added.