Accommodation costs surged by 35.4% year-on-year in November 2024, impacting hospitality, while festive demand offers opportunities for innovation and growth.
The latest Service Producer Price Index (S-PPI) for November 2024 reveals a sharp rise in accommodation costs, surging by 35.4% year-on-year making the Accommodation and Food Services subsector the highest contributor to inflation in the service industry.
The overall inflation for this subsector stands at 32.5%, driven mainly by the significant increase in accommodation prices.
The soaring accommodation inflation reflects higher costs for hotels, guest houses, and other lodging services. This rise comes at a time when the festive season is expected to boost demand for these services, leaving businesses grappling with how to manage rising operational costs such as energy, supplies, and maintenance.
In contrast, the Food and Beverage Services subsector showed a slight drop in inflation, falling from 18.3% in October to 17.0% in November.
While this decline offers a small reprieve for restaurants and catering services, it is overshadowed by the broader inflationary pressures in the hospitality sector.
The high inflation in accommodation costs means that families planning vacations and companies organizing year-end events may face higher-than-expected expenses. Businesses, too, are walking a tightrope, trying to balance rising costs with the need to remain competitive and attract customers.
Yet, amidst these challenges, there are opportunities for growth and innovation in the hospitality industry. The festive season still provides a chance for businesses to capture increased demand.
Experts suggest that entrepreneurs who offer affordable, creative, and customer-focused services can seize this moment to expand their market share.
Investors may also find opportunities in budget-friendly or mid-tier accommodations, where demand continues to thrive despite inflationary pressures.
The hospitality sector remains a vital part of Ghana’s economy, creating jobs and supporting industries like tourism, transportation, and event planning.
Despite the challenges, there is optimism that businesses that embrace innovation, efficiency, and customer satisfaction will not only survive but also thrive.
