May 20, 2020
More hotels face imminent closure as coronavirus impact on hospitality lingers on
The predicament of hospitality facilities, emanating from the outbreak of the coronavirus pandemic lingers on as there is no sight to the end of the COVID-19 crisis.
COVID-19 precautionary and control measures like border closures, ban of public gatherings including conferencing and other social event weddings have culminated to paralyze the hospitality industry. The situation has compelled many hotels to completely or partially shut down until further notice.
On Sunday, May 10, 2020, President Nana Addo Dankwa Akufo-Addo extended the ban on public gatherings until the end of the month, whilst the country’s borders also remain closed. The restrictive measures are geared towards curbing the spread of the virus as confirmed cases continue to soar.
Obviously, the extension of the restrictive measures, coupled with future uncertainties will further deepen the woes of hospitality facilities. The industry fallout which is currently unfolding is undoubtedly challenging and that more hotels have hinted of closing down should the situation persist for a while.
The General Manager of Eusbett Hotel, 3-Star facility in Sunyani, Robert Mensah, in an interview with the B&FT said since the beginning of the COVID-19 crisis, the Hotel had taken some difficult but inevitable measures, including job cuts to stay afloat, lamenting “if the ban on conferencing is not lifted soon, say till the end of the year, as a business hotel, we will have no other choice than to shut down business,”
He revealed that occupancy rate at the 150-room hotel with ten conference centres, has reduced significantly from 88 percent as at the imposition of the ban on public gathering to two (2) percent. The situation he noted, has accounted for cutting down staff from 154 to 60, adding “Of the remaining 60 workers, we run a two-week shift system where 30 people are on duty at a particular time.”
“The planned stimulus package for the hospitality industry is commendable, but to further help salvage the situation in this COVID-19 era and post-COVID-19, government must put hotels on a 3% corporate tax flat rate rather than the prevailing rate. A waiver on deduction on withholding tax, and exemption from import duties on core hospitality equipment for maintenance after the crisis,” he said.
A 2-Star facility in Sunyani, Tyco City Hotel with 152 rooms and eight conference centres also faces similar challenges, stemming from the impact of COVID-19. Since the implementation of the restrictive measures in the country, occupancy at Tyco has considerably dropped, hovering between 2%-5%.
The CEO of Tyco City Hotel, Nana Kwame Aning, who disclosed this to B&FT said the work force of 85 has been reduced more than 50 percent, saying “In the worst case scenario, we will close the hotel should situation lingers on for long.”
Both Tyco CEO and Robert of Eusbett share the view that it has become important for the government and health authorities to institute and enforce comprehensive safety protocols for conferencing and other social gatherings to take place. This they observed, will gradually help breath life back into the hospitality industry as well as cushion resurrection of the economy, particularly in the area of job creation and tax contribution.
Already, Falls Palace Hotel, a 2-Star facility at Kintampo in the Bono East Region have closed down after it kept recording zero occupancy for a while. The management of the 25-room hotel closed it on March 24, 2020.
Certainly, COVID-19 is the greatest global phenomenon crippling the hospitality industry since the global financial crisis in 2008. It will affect all levels of hospitality, but not everyone has the same capacity for recovery. Large hotel chains will certainly bounce back quickly, but for all other establishments, the pandemic is a test of adaptability and resourcefulness.