Economic Crisis: Abuja Hotels Forced To Close Down

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Hotel Owners Association Abuja laments over the Nigerian  economy and how greatly businesses have been affected as a result of imposed multiple taxation by the Nigerian government and the Municipal Area Council.

“The general operating environment is still very challenging for us. I have already made mention of the lull in business so far in 2015” says Mrs Bola Onigbogi, President of Abuja Hotel Owners Forum. “But our regulatory environment has not kept apace. We have been saddled with new regulations and tariffs that has made our operations very difficult, she lamented.

Addressing members during its annual event Friday, 11 December 2015 in Abuja, Mrs Onigbogi, President of the association said, “The year started with a 40% increase on our electricity tariffs. Then we were asked to pay an additional 5% of our revenues to a new body called “FCT Entertainment and Events Center Department”. We have also had to enter into discussions with Abuja Municipal Area Council to discuss some of the new Tariffs and taxes that they have levied on us this year. A combination of this punitive regulatory regime and low sales has resulted in a cocktail of hardship for Hotels in 2015.”

Speaking at the annual event organised by the association, Mrs Bola Onigbogi, President of the association said hoteliers are made the guinea pigs for every regulatory experiment. “Can we also ask that our regulators synchronize their activities amongst themselves? She asked. She then added that “The situation where we are billed from multiple agencies on the same item has to stop. A good example is the 5% entertainment fee which we have been asked to pay. What then is the use of paying VAT?”

Mrs Onigbogi went on to state that the continues squeezing of the hotel owners will be counter-productive to the socio-economic balance of Abuja.

“Our member hotels who have closed shop and laid off workers in their hundreds are a testament to this. A quick count of the amount of taxes that we pay shows that we pay up to 40 different taxes in Abuja. Can anyone survive this onslaught? Can any business thrive under this regulatory environment?”.

The association President also noted that businesses have been greatly affected as a result of the dwindling economic crisis after the general elections, “This year has not been a perfect year for the hotel industry in Abuja. Our sales and occupancy figures are dependent on the activities happening in the Abuja socio-economic environment. It will not take a genius to decode that with the elections and handover of government, things have been pretty slow in Abuja.

“We should remind our regulators that HOFA is a body of law-abiding corporate citizens. We will always live up to our civic responsibilities as stipulated by the law. But where we are confused as to the veracity of any regulation, we will be forced to ask for an interpretation from the appropriate quarter”. She concluded..

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WELCOME ADDRESS BY THE PRESIDENT OF HOTEL OWNERS FORUM ABUJA, MRS BOLA ONIGBOGI AT THE ANNUAL DINNER EVENT HELD ON THE 11^TH DAY OF DECEMBER 2015 IN AJUJI GREENWICH HOTEL, GUDU DISTRICT, ABUJA.

Good evening ladies and gentlemen. On behalf of the executives and the rest of HOFA, I’d like to welcome you to this event. It is an honour to all of us that you took time out to grace this occasion. We are grateful.

This is my first annual dinner as President of this association. I and the rest of the executives assumed office this year. Since then we have tried to build on the great strides left us by the great men that have previously occupied this post. Please permit me to acknowledge the efforts of our Pioneer president, Sir Chika Chiejina. This association was his brainchild. He nurtured and gave it the direction that we still aim to follow.

I welcome Chief Tomi Akingbogun, President of the Federation of Tourist associations of Nigeria (FTAN) and past president of Hofa. He has been an assuring guide of the current executive. His elevation as President of FTAN has also been of immense help to HOFA.

I also would like to recognize the immediate President of HOFA, Engineer Ekong. He has been a fantastic Mentor to me and Advocate for the affairs of HOFA.

I recognize the presence of the Father of the day and the Chairman Board of Trustees of HOFA, Igwe M.O. Kanu. Igweeeeee! I greet you sir.

Chief Imasuen, the Vice President, of the Board of Trustees, has also been of immense help to the executives over the past few months.

The past few months have not been easy. But standing on the shoulders of these giants of our industry has made the thorny road less so for the current executives. We are very grateful for all your help and we can only ask that your graciousness will continue to be there for us through the rest of our tenure.

This year has not been a perfect year for the hotel industry in Abuja. Our sales and occupancy figures are dependent on the activities happening in the Abuja socio-economic environment. It will not take a genius to decode that with the elections and handover of government, things have been pretty slow in Abuja. This has adversely affected the Hotel industry. The occupancy figures across the spectrum of hotels in Abuja for 2015 has been very low. Hotels that managed an occupancy rate of 50% this year are the outliers. Most of our member hotels have reported figures that are way below 50%. This has resulted in some of our member hotels closing shop or converting their facilities to other purposes. But a lot of us are still soldiering on, keeping our doors open, ministering to our guests and taking care of our employees. Can we all give a round of applause to all of us who have survived this year please?

It will be foolhardy of us to think that we have achieved all of us this by our own doing alone. We have had partners that have been helpful in our endeavors. The Nigerian Police have been fantastic in this regard. We have not recorded any ugly security incident in a hotel this year due to their efforts. From the IG of police, who has opened his doors to us, to the Commissioner of police, who is always a phone call away from our problems to their deputies and DPO’s, our relationship with the Police has proven the Police is our friend. So to the members of the Nigerian Police we say thank you!

Let’s not forget the board of the Abuja Environmental Protection Board. We were engaged in a bitter legal battle with AEPB in 2014 but thanks to the new Director and his team, we have since normalized relations with them. I must say that they have been very helpful to hotels in 2015. So I’d like to say thank to AEPB. Please keep it up.

The general operating environment is still very challenging for us. I have already made mention of the lull in business so far in 2015. But our regulatory environment has not kept apace. We have been saddled with new regulations and tariffs that has made our operations very difficult.

The year started with a 40% increase on our electricity tariffs. Then we were asked to pay an additional 5% of our revenues to a new body called “FCT Entertainment and Events Center Department”. We have also had to enter into discussions with Abuja Municipal Area Council to discuss some of the new Tariffs and taxes that they have levied on us this year. A combination of this punitive regulatory regime and low sales has resulted in a cocktail of hardship for Hotels in 2015.

We understand that hotels are the most visible businesses within the Abuja Skyline. We know that due to the visibility of our assets, it’s easier to start enforcement with us before other businesses.

This has made us the guinea pigs for every regulatory experiment. But I ask our regulators to remember that our member hotels are the highest employers of labour in Abuja after the Federal Government. Due to the nature of our businesses, we contribute a lot to the aesthetic value of the Abuja environment. We are also one of the biggest taxpayers in Abuja. Therefore, squeezing us will be counter-productive to the socio-economic balance of Abuja. Indeed, there are already indications that this is the case. Our member hotels who have closed shop and laid off workers in their hundreds are a testament to this. A quick count of the amount of taxes that we pay shows that we pay up to 40 different taxes in Abuja. Can anyone survive this onslaught? Can any business thrive under this regulatory environment?

We ask that our regulators be mindful of all of these as they discharge their duties. We demand that, as stakeholders in Abuja, we should be consulted before regulations are enacted so that we can advise on how best to implement them. Can we also ask that our regulators synchronize their activities amongst themselves? The situation where we are billed from multiple agencies on the same item has to stop. A good example is the 5% entertainment fee which we have been asked to pay. What then is the use of paying VAT?

We should remind our regulators that HOFA is a body of law-abiding corporate citizens. We will always live up to our civic responsibilities as stipulated by the law. But where we are confused as to the veracity of any regulation, we will be forced to ask for an interpretation from the appropriate quarters.

Ladies and gentlemen, we have had a long year. Pardon me for keeping your cutleries quiet and your plates empty. I do not wish to keep it this way. Please, have your fill, enjoy yourself and party with us. May the New Year come with many blessings for all of us and those we hold dear. Amen. Thank you.