Power costs biggest threat to hotel businesses – Panama Hotel CEO

Nigeria's hotel industry is facing significant challenges due to rising costs and electricity instability. Inflation has led to increased input costs, while customers' reduced purchasing power has made it difficult for hotels to charge higher prices for services. Diesel costs have skyrocketed, and hotels cannot raise service prices without affecting demand.

Additionally, the naira devaluation has exacerbated the situation, causing a surge in equipment import prices. Power supply issues have resulted in hotels spending up to 50% of their revenue on diesel, which is becoming increasingly expensive as electricity is not always reliable in Nigeria. Rising interest rates make it difficult for businesses to secure loans with manageable repayment plans.

Taxes and levies are not a significant concern for hotel businesses in Nigeria, as the cost of diesel remains the primary expense. If the government could provide stable electricity, many hotels would be willing to pay a reasonable tax to ensure uninterrupted operations.