Hotels lay off casual workers to cut operational cost as COVID-19 reduces patronage

The threat posed to businesses by the coronavirus pandemic appears to be reaching alarming levels particularly in the aviation and hospitality and tourism sectors.

In Ghana, some hotel managers have started laying off casual workers due to low patronage.

The hotel managers, who say patronage has dropped by a huge margin, want government to offer them some relief by way of tax cuts to prevent a complete shutdown of their facilities.

The COVID-19 has affected over 150,000 globally, with about 8,000 deaths.ADVERTISEMENT

Persons with the disease have been quarantined to avoid spreading to others.

Since the outbreak of COVID 19, business activities globally have witnessed a dip, running into huge financial losses.

The airline industry is one of the hardest hit with airlines losing billions of dollars due to a huge drop in bookings.

The sector that is beginning to also feel the brunt of the outbreak is the hospitality and tourism sector.

According to the Ghana Hotels Association, booking for rooms or conference halls have seen a massive drop in numbers.

The President of the Ghana Hotels Association, Dr. Edward Ackah Nyameke explained that due to the low patronage, hotel managers have been compelled to lay off casual workers to reduce their cost of operation.

“It is very true they have started laying off casual workers because a lot of the expenses in the hotel industry are kind of fixed. Whether you like it or not you have to pay. So then the situation is aggravated when there are no guests coming in at all. Nobody wants to send people home but the situation calls for it” , he explained.

To help contain the spread, the government of Ghana has announced some major steps which have affected both the airline and the hospitality sectors.

Individuals from countries that have recorded more than 200 cases of COVID 19 are being restricted from entering the country except Ghanaians or persons with resident permits.

This means that passengers scheduled to fly into Ghana from countries like the UK, China, Italy, Brazil, Austria, Belgium, Canada, France, and Germany among others cannot do so until such a time that the restrictions are revised.

There has been a huge economic impact caused by the pandemic, as air travel has reduced drastically.

The hotel managers say should the problem persist, they may eventually end up facing severe challenges that may collapse their businesses. Rene Vincent-Ernst, the General Manager of the Labadi Beach Hotel said.

The association further wants government to come up with some tax cuts to relieve them off some burdens.

The President of the Ghana Hotels Association, Dr. Edward Ackah Nyameke Jnr., told Citi Business News even though hotel managers are still paying high utility bills there is a sharp drop in patronage.

“We are looking at VAT rate being reduced if possible, is it possible to even adjust the electricity and water tariffs, is it possible to look at suspending the payment we make to regulatory bodies including property rates and similar costs, that’s what we want to know now”, he stressed.

The General Manager of Accra City Hotel, Roman Krabel, stated that, “All hoteliers in Accra are waiting for an official announcement, and we are looking forward to reduction in VAT, as well as the tourism levy”.

source citybusinessnews

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