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HospitalityMon, 18 Jan, 21

Growth of Hospitality Industry Worsens

Growth of Hospitality Industry Worsens

The hospitality industry in many jurisdictions tends to be driven by business and domestic tourism, leisure as well as an atmosphere of political stability. Nonetheless, the hospitality in the city of Accra is largely driven by business tourism rather than leisure tourism. Horwath HTL Group estimates that business tourism accounts for approximately 60% of the total hotel demand in Accra. Notable among the key players in the hospitality subsector include Movenpick, Kempinski and Golden Tulip hotels.

The hospitality (hotels and restaurants) industry subsector recorded a reduction in growth by 1.8% in 2016 from 2015. Before that, in 2014 the sector had grown at 1.5% using 2013 as a base year. PricewaterhouseCoopers (PwC) Hotel Outlook 2017 report indicated that the hotel (hospitality) industry was expected to grow by 1.1% in 2017, 2.1% in 2018 and 2.3% in 2019.

The Government of Ghana budget statement and economic policy for 2020 financial year indicated that, the hotel and restaurant subsector growth rates were 7.6%, 3.2% and 6.0% in 2017, 2018 and 2019 respectively. More so, the sector was projected to grow at 4.0% (lower than 2019) but as a result of the pandemic’s impact, it was later revised to -6.5per cent in the midyear budget review of 2020.

It must be noted that in 2014, the spread of ebola epidemic in West Africa (although Ghana did record a case) resulted in a decline in revenues from a 3-year Average RevPAR of USD134.5 between 2011 and 2013 to a RevPAR of USD123.8 in 2014, according to HVS. This was a major contributor to the lesser growth rate in that year.

Ghana hosting events such as World Tourism Forum in 2017 was a sign of the strides the hospitality industry was making. Political stability and economic growth put Accra, Ghana as a key regional player in the hospitality industry.

In 2019, the Ghana Tourism Authority (GTA) under the umbrella of the Tourism Ministry collaborating with the Office of Diaspora Affairs at the Office of the President, the Panafest Foundation and the Adinkra Group of USA, began a project dabbed “Year of Return, Ghana 2019”. This became a major landmark marketing campaign targeting the African – American and Diaspora as a way of remembering the first enslaved Africans arriving in Jamestown Virginia some 400 years ago.

It attracted a lot of visitors into Ghana to mark the occasion. In fact the BBC reported that, the Ghana Tourism Authority predicted the Year of Return would attract 500,000 extra visitors into Ghana. Meanwhile, the official data at the end of the third quarter of 2019 showed an additional 237,000 visitors with a significant increase in visitors from the US and UK.

The impact of it could also be observed in the growth level of the hotel and restaurant subsector in 2019. The project was expected to continue in 2020 but the pandemic outbreak halted it. As it has been projected in the midyear budget review, the hospitality industry would be severely affected. The market has never been stable consistently for a long period.

 

Source: Mohammed Bomanso Issah (Real Estate Times Africa)

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