Hotels aren’t shedding to Airbnb, they’re shedding to unfair laws – Hotels Association President

Introduction

The hospitality industry in Ghana is undergoing a significant transformation driven by the rise of short-term rental platforms. However, according to Dr. Edward Ackah-Nyamike, President of the Ghana Hotels Association, the perceived threat from Airbnb is often misunderstood. In a recent appearance on Joy News’ PM Express Business Edition, Dr. Ackah-Nyamike clarified that the struggle for traditional accommodations is not a failure of competitiveness, but rather a result of unequal regulatory frameworks. This article explores the dynamics between the hotel industry and short-let operators, the specific regulatory disparities highlighted by the Association, and the implications for the future of hospitality regulation in Ghana.

Key Points

Background

The Rise of Short-Term Rentals

The global hospitality landscape has been disrupted by the “sharing economy.” Platforms like Airbnb, Vrbo, and Booking.com have made it easier for property owners to monetize residential spaces. In Ghana, this trend has grown rapidly, offering travelers alternatives to traditional hotel stays. While this has increased accommodation availability, it has also created friction with established hotel operators who have invested heavily in infrastructure and compliance.

The Ghana Hotels Association’s Stance

The Ghana Hotels Association represents the interests of hotel owners and operators across the country. Their position has consistently been that while innovation is welcome, it must not come at the cost of fair market practices. Dr. Edward Ackah-Nyamike has been vocal in distinguishing between healthy competition and a distorted market created by regulatory loopholes. The Association argues that the hospitality sector is unique because it involves more than just a bed; it involves safety standards, health regulations, and community impact.

Analysis

Unbundling the Value Proposition

Dr. Ackah-Nyamike emphasizes that hotels provide a bundled value proposition. When a guest checks into a hotel, they are not just renting a room. They are accessing a complex ecosystem of services managed by professionals. This includes 24/7 security, on-site dining (food and drinks), entertainment facilities, recreational activities, and sometimes even car rental services.

In contrast, Airbnb listings are typically residential units. While they offer the “home away from home” experience, they generally lack the immediate availability of services and the rigorous oversight found in hotels. The Association argues that framing the two business models as identical is misleading. A hotel is a commercial enterprise with high operational overheads, whereas a short-let is often a residential property converted for commercial use.

The Regulatory Burden: A Tale of Two Systems

The crux of the conflict lies in regulatory compliance. In Ghana, hotels are subject to a multi-layered regulatory environment. They must secure permits and pass inspections from several government bodies, including:

• The Food and Drugs Authority (FDA): To ensure food safety and hygiene standards.
• The Ghana National Fire Service: To certify fire safety measures, including extinguishers, exits, and alarms.
• The Environmental Protection Agency (EPA): To assess environmental impact and waste management.
• Local Municipal Assemblies: For business operating permits and sanitation fees.

Dr. Ackah-Nyamike points out that many short-let operators bypass these stringent requirements. By operating under the guise of residential tenancy or through digital platforms that are not fully integrated with local tax authorities, these operators avoid significant costs. This allows them to offer lower nightly rates, not because they are more efficient, but because they are subsidized by non-compliance.

The Economic Distortion

This disparity creates a market distortion. When a traveler compares prices, a hotel room at GHS 500 might seem exorbitant next to an Airbnb listing at GHS 250. However, the hotel price must cover high corporate taxes, VAT, levies, and the salaries of a large workforce required to maintain compliance and service standards. The Airbnb price may only cover basic maintenance and profit. This “unfair playing field” erodes the profitability of hotels, discouraging investment in upgrades and new construction.

Complementarity vs. Cannibalization

Despite the grievances, Dr. Ackah-Nyamike acknowledges that Airbnb plays a complementary role. During peak seasons—such as Christmas, Easter, or major international conferences—hotel occupancy in major cities like Accra and Kumasi often hits 100%. In these scenarios, Airbnb saves the day by absorbing the overflow. Without short-lets, many travelers would simply be turned away, potentially damaging Ghana’s reputation as a tourist destination.

Therefore, the Association’s goal is not elimination but integration into a fair system. They want the hospitality sector to grow, but they insist that short-let operators must contribute to the national purse and regulatory ecosystem just as hotels do.

Practical Advice

For Hotel Operators

While lobbying for regulatory changes, hotels must focus on leveraging their unique strengths:

• Highlight the Bundle: Marketing campaigns should focus on the convenience of on-site dining, security, and professional service.
• Leverage Technology: Adopt property management systems that streamline check-ins and offer personalized guest experiences.
• Corporate Partnerships: Target business travelers who require reliability, safety, and invoicing—areas where Airbnb often falls short.

For Policymakers

To sustain the hospitality sector, the government should consider:

• Harmonizing Tax Codes: Creating a specific tax category for short-term rentals that ensures they contribute fairly.
• Platform Accountability: Requiring booking platforms to collect and remit taxes on behalf of hosts, similar to models in other jurisdictions.
• Standardized Safety Inspections: Mandating that all properties offering short-term stays pass basic fire and health safety checks.

FAQ

Conclusion

The narrative that hotels are losing to Airbnb due to a lack of innovation or service quality is inaccurate. As articulated by Dr. Edward Ackah-Nyamike, the core issue is regulatory asymmetry. Hotels are willing to compete on service, amenities, and experience, but they cannot compete on price when that price advantage is derived from avoiding taxes and safety regulations. For the Ghanaian hospitality industry to thrive, there must be a move toward a harmonized regulatory environment. This ensures that all accommodation providers contribute equally to the economy and prioritize guest safety, fostering a sustainable and fair tourism ecosystem.