High cost of living responsible for hotel price hikes in Ghana – Hotel association
The President of the Ghana Hotel Association, Dr. Edward Ackah-Nyamekye has blamed the relatively high prices of Ghanaian hotel prices on the high cost of living in the country.
Speaking on the Citi Breakfast Show, Dr. Ackah-Nyamekye admitted that he has heard concerns raised over the exorbitant prices of hotels in Ghana but said the situation could be better appreciated if it was contextualized.
The Ghana Hotels Association is hoping to increase the price of its services in the coming, but some persons who patronise their services say prices charged by the hospital industry in Ghana are high compared with the same sector in other African countries.
The GHA President argued that a number of unique factors come to play in determining the prices of these hostels; thus, it may be unfair to rate them on the same level.
“There is the belief that our hotel rooms are more expensive than other countries in the sub-region, and this has been with us for quite some time. But then it is important for us to situate this comparison within the environment we operate in.”
“The GTA and the Ministry of Tourism, Arts and Culture could help us to do a more detailed comparison into what goes into hotel pricing in Ghana and others in the subregion as well. We operate in an economic environment and every hotel has its utility charges. The exchange rates, lending rates, adverts, import duties, cost of living, fuel prices, and salaries all come to play. Until we compare all these factors with the situation in other countries, we can’t really say prices in Ghana are outrageous.”
He further explained that “the cost of doing business in Ghana is high, and a businessman who would not want to fold up will have no option but to share or push the cost to the customer.”
A hospitality consultant with the Hallmark Hospitality Group, Nana Kwabena Kwarteng also made a case for the ‘outrageous’ prices of hotels in Ghana.
“When you compare a Holiday Inn hotel in Ghana to one in South Africa, you realize that the one in South Africa may have a lending rate of 7% whereas that of Ghana might have its lending rate at 24%. “
“At the end of the day you see that all the matrices when they feed the indices, the cost per occupied room will have a higher cost, and therefore when your cost is higher, definitely your selling price will be too.”
Appiah Adumako Kusi, who has done extensive research on competition law, touched on whether or not there are laws to address unfair business practices.
“There is a problem with pricing in Ghana, especially in the formal and informal sectors of the economy. Hotel prices for instance are now dynamic where they are determined by the demand.”
“Ghanaian hotels however do not adopt this. Instead of reducing prices where demand is low and increasing at peak seasons where demand is high, they remain static. That explains why most of the hotels in the country are not patronised.”
“Competition law looks at excessive pricing, and the law can be triggered to whip such businesses back in line. Ghana’s competition laws look at excessive pricing. So if it is found out that your price is outrageous, stemming from a firm exploiting customers, competition law is invoked. When this is not done with care, it may scare others from entering the market,” he explained.
Ghana has been classified as one of the most expensive tourist destinations in Africa by TripAdvisor, in relation to hotel rates and tour packages.
According to the Ghana Hotel Association, international tourists spend almost 60 percent of their budget on hotel accommodation.
In other countries in the subregion, such as South Africa, rates are also lower, standing at US$240 per night compared to Ghana’s situation for 5-star hotel accommodation of the same period.
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