Ghana Hotels Association has observed with deep concern an advice purported to have been given to Government by an Economist, Dr. Laud Mensah, in relation to government’s consideration of a stimulus package for the hospitality industry in the wake of the damaging impact of the COVID-19 Pandemic.
Much as the Economist appeared to make a good case against any stimulus package for the hospitality industry due to the negative business environment created by COVID-19, Dr. Laud Mensah did a great disservice to the hospitality industry by not presenting a balanced view of the situation on the ground.
A stimulus package, as the term implies, is given by governments or funding organisations to stimulate growth in a strategic business sector that is underperforming. And as the Economist rightly put it, it may not be the wisest economic decision for government to consider a stimulus package for the hospitality industry now in the light of the ongoing spread of the virus; the closure of international borders and lockdowns.
In our humble opinion, however, Dr. Laud Mensah should have looked at the other side of the coin, which is the need for government to organise an urgent Distress Alleviation Package for the hospitality industry; unless of course he believes that is also unjustifiable. In other words, the eminent Economist should have distinguished between a Stimulus Package and a Distress Alleviation Package in his discourse to provide a fair and balanced advice to government.
The tourism and hospitality industry, which includes hotels, restaurants, tour operators, car rentals and aviation services among others, is a significant contributor to the economy of Ghana in the form of employment, taxes, levies, licenses, foreign exchange earnings etc.
The World Travel and Tourism Council (WTTC), in a report in 2017, highlighted the impact of the sector on Ghana’s Gross Domestic Product (GDP) and on job creation. The report noted that “the total contribution of Tourism (and Hospitality) to GDP was GH¢12.6 billion or 6.2 percent of GDP in 2017. On job creation, it said the sector’s contribution to employment, including jobs indirectly supported by the industry was 5.3 percent of total employment (882,000 jobs).
It is perhaps worthy of mention that the contributions of the industry to the nation continues even in this pandemic with hotels releasing their facilities as Quarantine Accommodation and the Chefs Association of Ghana cooking for the needy and vulnerable.
With such significant contribution to the economy, it is only fair, and certainly prudent, for government to intervene with a Distress Alleviation Package when the industry finds itself on its knees due to an extraneous factor such as COVID-19.
We don’t believe that anybody would argue with the fact that the tourism and hospitality industry is one of the hardest hit by COVID-19. Indeed, a lot of hotels have shut down and some are planning to if the situation continues as it is. This will obviously affect the thousands of hotel workers whose livelihood depend on their employment in the industry.
Drawing the curtain on our reaction to Dr. Laud Mensah’s purported advice to government to ignore any stimulus package to the hospitality industry, we hereby reiterate our call for a Distress Alleviation Package as follows:
- Temporary Suspension or significant reduction of taxes (Reduce VAT to 3 percent; and Corporate Tax to reduce by 80 percent; and remove levies, pension and license fees (Business Operating Permit, Environmental Protection Permit, Food and Drugs Authority Permit, Property Rate etc).
- Significant reduction of utility tariffs (convert commercial rates to domestic rates)
- Support with payment of staff salaries.
- Soft loans
The association wishes to remind all of the need to be fairly balanced in their utterances on matters related to COVID-19 and its impact on business and livelihoods, since as the President of the Nation has admitted, “we are not living in normal times”.
God bless our homeland Ghana and make us great and strong.
>>>This article was authored by the Ghana Hotels Association