The Federation of Tourism Association of Nigeria (FTAN) has expressed worries over possible impacts of the rising costs of the premium motor spirit (PMS), commonly known as petrol, and diesel on the tourism sector, saying that the increasing cost of the two products will worsen the state of the hotel and hospitality industry and the Nigeria’s ailing economy.
BusinessDay investigation in Imo State showed that filling stations in the outskirts of Owerri, the Imo State capital, are selling at N1200 per litre for petrol while the diesel costs N1,300 or N1,500 per litre depending on where you want to go for purchase. But in the remote villages, road side sellers or black marketers sell a litre of fuel at N1,500.00.
Odunayo Ogunyemi Julius, vice president, Federation of Tourism Association of Nigeria(FTAN), South East and general manager, Benchmark Hotel, Owerri, in a telephone interview, expressed worries, saying that the increase in petrol pump price would lead to increase in transport fares and prices of goods and services, and that such could leave the masses with little disposable incomes.
Ogunyemi further said that already, there was decrease in the purchasing power of the masses and that it has already led to reduced demand for non-essential goods and services.
He also said that the development has affected the hotel and hospitality industry even though almost all the hotels use diesel to power their listers or generating sets.
He noted that the movement of guests from one hotel to the other would be directly affected because the increase in the transport will also affect the pockets of guests, according to him, “movement of customers from one hotel to the other is a part of hospitality and tourism.
“If a guest is meant to stay for three days in a hotel, by the time the high cost of transportation system has already taken a big chunk or part of the money in his pocket, he may reduce his stay to two days or even one day.
“Or alternatively, he may even find any place either in his friend’s house or any member of his family to go and stay, not minding the inconveniences that he will see there. And after finishing what he came for, he will go back to where he resides. So, it is going to affect the market share of the hotel and hospitality industry.”
Ogunyemi, who is the general manager of Benchmark Hotels Limited, in accounting as well as an instructor in the hotel and hospitality management sector, bemoaned the rate at which hotels in Imo State are closing down due the prevailing economic crunch in the country, induced by high cost of diesel and other negative factors.
“Already most of the hotels are closing down as a result of their inability to purchase the diesel that they will use to power their hotels, because the influx of guests has been reduced and the level of patronage is low,” he said.
Ogunyemi informed that the current economic situation of the country “is affecting the sales performance of hotels and the profit margin,” just as he said also that it is affecting the workforce, causing downsizing in most of the hotels.
According to him, “You cannot keep the number of staff you cannot pay; it does not portray a good image of the hotel. And you will reduce the staff strength so that the remaining will be able to give optimal service.”
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