Government should check double taxation in hotel business --- Odunayo, GM, Benchmark Hotels
Imolites are very accommodating and Owerri, the capital of Imo State, is located in the centre of the Eastern Region. These Imoadvantages and others have made Owerri a thriving City for the leisure and hospitality sector of the economy. OGUNYEMI ODUNAYO, general manager of Benchmark Hotels Limited, spoke to SABY ELEMBA in Owerri. Excerpts Investors in the hotel and tourism sector of the economy say that the tourism sub sector is a tough one because of the many challenges faced by operators. Do you have a different view from what others say?
TO START WITH, THERE is no business without challenges. So ours is not going to be an exception. We have a number of challenges though we are still trying to see how we can manage these challenges; they are such that can not close down our business. The number one challenge is power. In this industry, power is a major challenge because if you look at the cost of running generators it is quite on the high side.
To start with, there is no business without challenges. So ours is not going to be an exception. We have a number of challenges though we are still trying to see how we can manage these challenges; they are such that can not close down our business. The number one challenge is power. In this industry, power is a major challenge because if you look at the cost of running generators it is quite on the high side.
The introduction of the prepaid meter by Enugu Electricity Distribution Company (EEDC) is another challenge that is actually disturbing. This has led us to managing our energy effectively; any facility that is not in use should be put off in other to conserve energy. So the bill we pay to EEDC is very high and that is why I say it is a challenge because the bill is high and for us to pay that bill, we have to sell a good number of rooms, foods and drinks.
So if we don’t sell a good number of rooms it will be difficult for us because hotel is a place you have to run 24 hours power and you don’t say you have one or two guests, that you would not power your hotel. No, you will power your hotel always. So the cost is actually disturbing. It is a very big challenge but we are just trying to see how we can manage by providing energy.
Don’t you see the introduction of the prepaid meters in Nigeria as a good thing and a welcome development for both the private and commercial consumers?
It is a welcome development but the increase in the tariff is the challenge. The prepaid meter is not a challenge but the increase in tariff of the bill is what I am talking about because we were on N23 per unit before now but all of a sudden it went to N45.24 which is double and almost 100 per cent increase. And you cannot increase your tariff in the hotel to 100 percent because of the increase in EEDC bill; people will go to other hotels. We re- ally have to do a lot to meet up with paying the bills that is the problem.
You have told us that power is the major challenge you face, are there other major or minor challenges that you can tell the public?
We have others, like a lot of hotel managers are complaining about accessibility to their hotels. I remember one of the managers at the new Owerri talked about access to his hotels which is a very big challenge. There is need to work on some of the roads in the city, a lot of roads are going bad; they require government’s attention.
There is another type of bill coming from the government which is also disturbing, double taxation. This bill is been duplicated and if you look at it critically you will also know that we are being double taxed by the government and its agencies in the state.
Do you have evidence to prove this?
Yes, there are so many evidences even other managers running other hotels will also show you evidences that some of the taxes are duplicated. We are being double taxed unnecessarily, the government has to look inside and harmonize it so that the touts will not take control of the system.
Has this been made known to the government?
Yes, we have been talking to the government about this problem of double tax payment but they have been giving us assurances that they were going to look into the activities of those claiming to be agents. So we hopefully believe that the government will do something about it because we know what we are supposed to pay. And we will not be here and allow touts to come and tax us unnecessarily, we will not take it.
You have talked about the high tariff from the EEDC and in most cases you tend to run your generators because of the epileptic power supply to ensure that you have power always. Can you tell us how much you spend monthly on diesel?
Yes, you see on the average, you will find out that a hotel of our own size will be spending N1.5mN3million a month to buy diesel apart from the bill of EEDC which is quite on the high side. And we were buying diesel for N170 before but as I speak with you now, diesel is being sold for N270 per liter. So it is a very big challenge.
As a seasoned manager in the hotel and hospitality sector, thereare many challenges that might pull down a business of this type. Now is this sector still viable in Imo state?
This sector is still viable and thriving, viable in the sense that Owerri has a unique setting. If you look at Owerri it is in the centre of the east geopolitical zone of the country. And not just because it is in the centre of the East but the Imolites are very accommodating.
So people like where they go to and they are properly accommodated. Owerri and the Imolites are very accommodating, friendly and people like to associate with the Imolites because of their nature.
The environment of business here is not so bad but there is room for improvement, so Owerri is good and the Imolites are accommodating so that is where I will say that the business is quite encouraging.
What do you think the government should do to widen this sector or attract more investors?
There is the need for the government to look at creating sites that will attract tourists into the state because if we have enough sites in the state, they will attract a lot of tourists. This could be done through the public private partnership (PPP) if the government feels it cannot do it alone, it could partner with the private sector on the areas that need to be tapped and which would be of benefit to the hoteliers.
When we talk about creating sites, there is Oguta Lake and others and there is need to develop them so that tourists would come. Government should invest in tourists’ attractions in the state and when they come to the state, they will ultimately sleep, eat and thereby patronizing the hotels and we will benefit a lot.
How much do you see this sector helping in absorbing the unemployed people to decongest the unemployment market?
Yes, I think the hospitality industry is a major employer of labour in the state and is a major one that has really helped the government to cushion the effects of unemployment in the state. Because if you look at the number of employees in the hotels critically, you find out that these people that are employed in the hotels were out of jobs, it could create problems for the society. When you employ one person he will take care of the wife, brother or children. So if you employ one person, you have actually employed three or four persons because you can make money alone but you can not spend the money alone.