Hotel occupancy declines in peak tourist season as Airbnb business booms

Despite successive growth in terms of visitor numbers for Ghana Tourism Authority’s (GTA) annual flagship event known as ‘December in GH’, hotel occupancy for tourists and visitors have declined in the last few years.

‘December in Gh’, a peak tourist season which is expected to largely benefit hotel businesses across the country, has seen dwindling fortunes in occupancy rates according to data from the GTA.

The 2023 Ghana Tourism Report indicates that hotel stays declined slightly by five percent in the last few years, while Airbnb usage has been surging from 11.5 percent in 2021 to 27 percent in 2023 – with predictions of further occupancy growth in the coming years.

A B&FT analysis of accommodation trends and preferability attributes the situation to high cost of hotel rates due to the near-twenty taxes operators and patrons have to contend with.

For instance, a significant portion of tourists’ budget – almost 80 percent – is allocated to accommodation, a sub-sector known for its high costs. According to the 2023 Ghana Tourism Report, accommodation accounted for the highest average spending of tourists at nearly US$500 weekly in non-star rated hotels.

Numerous taxes impact the sector’s pricing mechanisms. Despite the high prices, Ghana aims to increase tourist arrivals to around two million international tourists in 2024 compared to the 1.1 million recorded last year.

In 2023, international tourist arrivals reached 1.1 million – a 25 percent increase from the previous year. US nationals constituted the largest group of participants with 39 percent, followed by Ghanaians residing abroad (33 percent), the UK (16 percent) Nigeria and Germany (6 percent each) and South Africa (4 percent).

Indeed, ‘December in GH’ as a flagship event has in itself seen a growing appeal, with first-time visitors increasing from 40 percent in 2022 to 47 percent last year.

The GTA maintained that sectors including accommodation, entertainment, food and beverages, transport and shopping contributed immensely to participants’ spending.

According to the report, the average daily spending per participant at the events surged from US$606.79 in 2022 to US$1,376 last year – representing a substantial increase of 126 percent.

Despite these gains, hotel owners and stakeholder have expressed concerns of losing critical tourist numbers to other accommodation units as they continuously struggle due to the sector’s multiple taxes.