The Impact of Power Outage “Dumsor” on the Hotel Industry: Evidence from Ghana

Abstract

Ghana has for several years been experiencing massive power blackouts popularly nicknamed 'Dumsor,' which means on and off in the Akan dialect. The role of electricity in Ghana’s economy is prodigiously significant for growth and development. The purpose of the study was to explore the impact of power outage (‘Dumsor’) on the hotel industry in Ghana. The study adopted an explanatory research design covering a stratified sample of 100 drawn from 5, 4, 3 and 2 stars hotels across major cities in Ghana. A set of structured questionnaires was used to collect data and analyzed through descriptive and inferential statistics. The validity/reliability test indicates that the questions were 89% reliable to be used for explanatory analysis of the study and achieved a response rate of 93%. There was a general outcry of unreliable power supply as majority of the respondents indicated the hotels experienced lights out intermittently and unannounced within a week for not less than 12 hours per day which has led to low productivity (86%). Also 92% of the respondents indicated that the effect of ‘dumsor’ has led to high production cost, high rate of redundancy of employees, an increase in maintenance cost, damage to plant/equipments/appliance and perishability of items. The five independent variables accounted for 90% of variations as a result of the power outages and were thus critical to the smooth operations of the hotel industry in Ghana. The study also revealed that an increase in power outages by one unit will increase and worsen the situation (redundancy, perishability of items, and cost of alternative power supply, damage to plant/equipment/appliances and maintenance cost) by 0.401, 0.228, 0.426, 0.218 and 0.316 respectively. To improve on this menace energy crisis, the government and stakeholders should put mechanisms in place to avert this energy canker. Government should have the political will and put incentives in the area of power generation to make it workable.

Keywords: Hotel industry, power outage (‘Dumsor’), power supply, explanatory research design and regression coefficients.