Hotel Owners Reject Over 200% Increase in Electricity Tariff

Olawale Ajimotokan in Abuja

The Hotel Owners Forum Abuja (HOFA) yesterday rejected the over 200 per cent increase in electricity tariff for Band A customers in the hospitality industry.

It issued the rejection at a joint briefing it held with Abuja Chambers of Commerce and Industry (ACCI), Federation of Tourism Association of Nigeria (FTAN), Manufacturers Association of Nigeria (MAN), Hospitality and Tourism Management Association of Nigeria (HATMAN), National Electricity Consumer Advocacy in Nigeria (NECAN), and Association of Master Bakers and Caterers of Nigeria.

The President of HOFA, Mrs Funmi Kazeem, who spoke on behalf of the coalition, lamented what she said was the unprecedented escalation in electricity tariff, saying it would kill hotel business in Federal Capital Territory (FCT) in a matter of a month because of its implication for the industry’s sustainability and growth.

She said many hotels had not recovered from the impact of COVID-19 pandemic as they were faced with plummeting occupancy rates, dwindling revenues and heightened operational cost associated with enhanced health and safety protocols.

Kazeem said the increase in energy cost, places an immense strain on hospitality establishments, eroding profit margins, and hindering their ability to invest in essential upgrades, innovations and guest amenities.

 In the face of this, coupled with multiple taxes and other multifaceted challenges, HOFA urged the regulatory authorities to reconsider the tariff hike and explore alternative solutions that balance the need for revenue generation with the imperative of supporting economic recovery and growth.

It condemned the timing of the introduction of tariff increment, noting that the Nigerian economy had been hit by the effects of subsidy removal and high cost of inflation.

“So rather than increase in tariff the federal government and Nigerian Electricity Regulatory Commission (NERC) should support businesses to survive by rolling out palliatives which will enhance high standards expected in the hospitality industry thereby fostering tourism.

“Any tariff increment at this time will bring untold hardship on the already struggling businesses and many will lose their jobs with the resultant consequences ranging from insecurity, among others,” Kazeem said.

Also, the Chairman the Board of Trustees (BoT) HOFA,  Chika Chejina, said  hotels of 20 rooms that were hitherto billed N1 million per month were now billed N3.5 million per month, while those of 40 rooms, previously charged N2 million monthly are now paying N7.5 million per month as tariff.

He urged government to urgently intervene, saying if the situation perseveres, in a couple of months, many of the hotels will close shop and throw their workers into the job market.

Related Articles