Tourism and hospitality to lose $171m from COVID-19 in four months

Ghana’s tourism and hospitality industry is expected to record a combined loss in revenue of US$171 million within four months, among the many adverse effects of the novel coronavirus disease.

That is according to the Minister of Tourism, Culture and Creative Arts, Barbara Oteng-Gyasi.

Speaking at a Ministry of Information press briefing in Accra on Thursday (4 June), Oteng-Gyasi said: “From an assessment that was done between March and June, it was indicated that the operators, both formal and informal, were going to register losses of about $171 million over the period.

“But importantly the government recognises the importance of the sector to the economy – the contribution to the economy in terms of revenue generation as well as job creation – and it is not in the interest of the government that we register job losses in the sector,” she said.

Tourism is one of the areas of Ghana’s economy hardest hit by the COVID-19 outbreak. At the end of last year the sector had been projected to create about a million jobs and contribute about 6.2% to Ghana’s GDP.

Most of the income realised through the sector comes from foreigners visiting Ghana.

However, it has suffered a sharp drop in demand and a surge in job losses. Analysts predict that revenue from the sector will continue to dip a little longer in response to the closure of Ghana’s borders.

Vital contribution

The Tourism Minister said President Akufo-Addo has constituted an interministerial committee to assess the impact of COVID-19 on the sector and come up with a stimulus package for businesses in the industry, most of which are struggling.

“Recognising the importance of the tourism and hospitality sector to the economy, His Excellency the President has constituted an interministerial committee to look specifically at the sector,” she said. “It will come up with a proposed stimulus package to support the industry, to alleviate the hardship during this very difficult period and make sure that it recovers post-COVID-19.

“That exercise is also going on with what we have done in the initial report. We are engaging more with the ICUs [branches of the Industrilal and Commercial Workers’ Union] of the various hotels, because the government is interested in ensuring that we do not lose jobs in the sector.

“They are also coming up with proposals, and we will make sure that we submit to the government to put in place a stimulus package specifically for the tourism and hospitality industry,” she said.

Sector to benefit from $9m facility

Mrs Oteng-Gyasi also announced that, in line with other measures to mitigate the economic impact of the pandemic on the tourism and hospitality sector, the government has secured a $9 million facility from the World Bank.

The facility, which will be made available under the Bank’s Tourism Development Project, will help strengthen the industry, she said.

The minister recently announced that the Year of Return tourism initiative had raked in $3.3 billion. Government estimates show that the average expenditure per tourist was $2,391.

The minister said the money was spent mostly on accommodation, food and beverages, shopping, local transport and entertainment.

Responding to questions in Parliament on Thursday 28 May, the minister said that the government still intends to build on the success of the Year of Return, which marked the 400th anniversary of the first recorded sale of black Africans as slaves in North America.