By Yahaya Idris, Asaba
Hotel operators in Nigeria have called for urgent measures to reduce the cost of doing business, citing poor electricity supply, multiple taxes and rising operating expenses as major threats to investment and employment.
The National Secretary of the Nigerian Hotels Association (NHA), Prince Amos Uyo, raised the concerns while speaking on DOTT TV in Asaba, Delta State.
Uyo said the hospitality industry had strong links with several other sectors of the economy and that difficulties confronting hotels could have wider consequences for transportation, food vendors, entertainment businesses and retailers.
He said hotel operators were already contributing to government revenue through taxes and levies but were being confronted with numerous charges from different government agencies.
According to him, hotels currently face more than 25 different taxes, levies, rates and regulatory charges.
Uyo said the issue was not the payment of legitimate taxes but the duplication of charges and the lack of coordination among collecting agencies.
Operators Bear High Electricity Costs
The NHA secretary said inadequate public electricity supply had forced many hotel operators to invest heavily in alternative power sources and electricity infrastructure.
He disclosed that he personally spent more than N20 million to extend a commercial electricity line to his hotel, including the purchase of cables and a transformer.
He questioned the situation in which operators could finance significant portions of electricity infrastructure and still be required to pay distribution companies for electricity services.
According to him, such expenses add significantly to the cost of running hotels and are eventually reflected in the prices paid by customers.
Investment Moving to Other Markets
Uyo warned that high operating costs could discourage investors from expanding Nigeria’s hospitality sector.
He said some investors were considering countries such as South Africa and Rwanda for new hotel projects, citing what he described as more attractive infrastructure and tax environments.
He said the consequences of declining investment would not be limited to hotel owners.
“When people travel and come to Asaba, when there are meetings and conferences in Asaba, there is an influx of people. The hotel will smile, the market woman selling will sell, and the transportation operators will also benefit,” he said.
NHA Proposes Tax Reforms
To reduce the burden, Uyo called for the harmonisation of hospitality taxes through a single-window collection system.
He proposed that legitimate taxes and levies be collected through one platform and shared among the three tiers of government according to an agreed formula.
He also proposed limiting hotel-related charges to five major payments: VAT, Company Income Tax, Tourism Levy, Tenement Rate and Waste Levy.
In addition, he called for the establishment of a National Tourism Tax Ombudsman to handle complaints from operators.
The association also proposed a five-year tax holiday and single-digit interest loans for new hotel investments.
NHA Raises Employment Concerns
In its position paper, the NHA claimed that more than 30 per cent of small hotels had closed or downsized in the past 24 months because of operating costs.
The association warned that excessive taxation could become counterproductive if higher operating expenses force hotels to raise room rates, reduce demand or close down.
It therefore urged the National Assembly, particularly the Senate Committee on Tourism, to consider legislation that would harmonise hospitality taxes and establish a predictable regulatory framework.
The association also called for mandatory consultation with hotel operators before new levies are imposed.
Uyo said hotel operators were prepared to pay legitimate taxes but needed a system that would allow businesses to survive, expand and create more jobs.
He said coordinated action by the federal, state and local governments could strengthen the hospitality industry while expanding economic activity and government revenue.