Impact of coronavirus on hospitality industry

On March 12, 2020, Ghana recorded its first two cases of the deadly Corona Virus (COVID-19), being among the first five African countries to record cases of the virus that was first detected in Wuhan in the People’s Republic of China.

The Tourism and hospitality forms a critical sector for the Ghanaian economy; in terms of its employment potential and international visitor spending, however with the close down of all commercial activities within the sector for over one year has created a financial valley in the accounts of its investors.

Apart from the loss of human lives, the tourism and hospitality industry continues to remain the hardest hit by the COVID-19 as according to the former Minister of Tourism Arts and Culture, Mrs Barbara Oteng-Gyasi, “Ghana lost an estimated tourism revenue of US$171 million in a space of four months – from March to June, because of the pandemic.”

Tourism revenue loss

Before the arrival of the uninvited guest called COVID-19, the sector had seen an increase in international visitors as a result of the 2019 Year of Return campaign, which marked 400 years of slavery.

The campaign resulted in a growth of 18 per cent in international arrivals from the Americas, Great Britain, the Caribbean and other key target countries whilst total arrivals increased by 45 per cent compared to 2018. Estimated average spending increased from US$1,862 in 2017 to US$2,589 in 2019 (MoTCCA, 2020).

A survey conducted by the Ghana Tourism Authority (GTA) showed that each tourist, spent not less than US$2,931 on accommodation, car rental services, food and attendance of entertainment events or concerts during the ‘Year of Return’.

COVID-19 pushes hospitality workforce out of job

The COVID-19 pandemic had a significant impact on reducing the size of the tourism and hospitality workforce. The GTA (2020) estimated that 275,000 jobs were at risk in the sector as a result of COVID-19. Approximately 40 per cent of employees of hotels, restaurants, travel and tour operators took their leave and a further quarter been laid off. Conference Centres in contrast laid off over a third of their workforce.

COVID-19 swallow’s tourism funds

An amount of US$4million dollars was later allocated towards the development of tourism sites and information, in 2020, alongside US$5million for tourism enterprise support.

Operators in the tourism and hospitality industry, also had the opportunity to apply for support from the GHS600 million COVID-19 Alleviation Programme, meant for micro, small and medium scale enterprises, being disbursed by the National Business for Small Scale Industries (NBSSI).

Impacts of the pandemic on businesses included shutdowns, booking cancellations, revenue drops, lay-offs and defaults in the payment of pension contributions and taxes. The pandemic greatly impacted the accommodation, transportation and souvenir shop operators compared to food and beverage (F&B) operators due to the temporary closure of Ghana’s borders and major attractions.

Mr Akwesi Agyemang, Chief Executive Officer of the Ghana Tourism Authority (GTA), in an interview with the Ghana News Agency, said globally people were appreciative of the fact that Ghana was one of the few countries that had observed the COVID-19 protocols and that had given people the confidence that Ghana was the destination.

He said the industry was one of the sectors that was badly hit by the pandemic; “It has been tough and long but we know that better days are coming. Most industry players have been affected by the pandemic especially with the closing of theatres, restaurants, beaches, and hotels,” he said.

Mr Agyemang said GTA is confident that by the second half of the year things would be much more open and once things were ok, and people would be allowed to travel they would want Ghana to be the destination they would be.

“And so when we say they should exercise restraints and patience that is what we mean. The industry players have been engaged fully, and they are aware of the challenges and where we want to take the industry, and I believe that Ghana would still rank as one of the destinations for the African diaspora when things settle, because even within these times people have come and still want to come because we have kept in touch with them through our webinars, return conversations, zoom meetings, the master class sections among others.”

Mr Agyemang, said the GTA had developed so many strategies that even as people were not travelling they still think Ghana as a destination; if things become normal and they were hopeful, that given that the vaccinations were going on globally it would not be long before countries would open up and Ghana would be one of the countries.

“It has been tough across the globe and so people have understood. If you look at the number of people who visited Ghana in 2020, we ended the year around 355,000 which is a drop of almost 68 per cent in both revenue and numbers,” he said.

He urged industry players to be patient, as there was the need to protect lives first before looking at livelihoods. “We are very confident and hoping it would not be long, things would start picking up again and people who are waiting to come here would start coming, and the sector would rise again.”

Mr Emmanuel Frimpong, Executive Secretary, of the Ghana Tourism Federation (GHATOF), told the GNA that right from the closure of the boarders the industry started feeling the negative impact of the pandemic.

He said the industry was basically empowered by the movement of people within and outside the country, so without movement it could not survive.

He said they saw that COVID-19 brought a new normal so they began to build the capacity of members, with support from the International Labour Organisation, and training in social media and online marketing so that they would be able to sell their products and services.

“We also embarked on a lot of media campaigns to educate members and considered promoting domestic tourism, since international travels were not happening and we had to do something to keep our heads afloat,” he said.

He said 2020 was the most challenged year for the industry in terms of productivity and performance, saying the sector really depended on people moving and gatherings, so the lock down and restrictions affected their businesses.

“Productivity wise, it has not been good for us, we have gone down. Arrivals into the country as at the end of last year was about 370,000 people against the 1.3 million people in the 2019.

“When you look at performance in terms of the hotels and restaurants no activity is really going on and productivity is low. Since September last year when the airports were opened some activities picked up, but it has been slow. Most hotels are operating between five to 30 per cent capacity, while some have not even opened at all.”

Mr Frimpong was however optimistic that the industry would bounce back as previously, saying that the tourism and hospitality industry has always been resilient, and would bounce back but might take longer than they could imagine.

He said “every player in the industry depend on each other, so if there is a break in the link, then there is a challenge, and that is why as a private sector, GHATOF needs to connect with everyone in the sector and also make sure that we do well and support each other while pushing for government support”.

Mr Frimpong said they have not had much from government because they were yet to benefit from the support from NBSSI and World Bank grant, but was hopeful that if they have these support from government and other development partners then the industry was likely to bounce back.

He said GHATOF was looking at promoting domestic tourism, looking at capacity building, retraining staff and also developing attraction sites as most of them were not visitor friendly.

“We are also looking forward at engaging government and other development partners for support in terms of loans, or any other support that would help the industry, collaborate with institutions to embark on domestic tourism, because international arrivals would take quite some time to go up.

“We believe that if we are able to put some of these things in place we should be able to do well, hoping that by the third quarter of the year the industry would pick up fully.”

As a result of COVID-19, all public gatherings such as workshops, conferences, funerals, festivals, sporting activities and religious activities, were suspended for four weeks, all universities, Senior High Schools, and Basic Schools (both private and public) were shut down.

All establishments, such us supermarkets, restaurants, hotels, and public transport services were to observe enhanced hygiene procedures by providing running water and soap for washing of hands and hand sanitizers, and all businesses and other workplaces continued to operate but observed the prescribed social distance of 1-meter and other hygiene conditions.

A week on, the President updated the nation on the status of those measures put in place to help minimize the possibility of further infestation, and again placed additional stringent restrictions on travel by ordering the closure of Ghana’s land, sea, and air borders to human traffic effective midnight, 22 March 2020.

All these restrictions even though were put in place to halt the spread of the virus, had immense effects on all aspects of human lives and sectors of the economy and the tourism sector was not left out.