Effects of Increase in Electricity Tariff on Business Profitability: A Case of Ibom Hotel and Golf Resort, Uyo-Akwa Ibom State (2010-2023)
DOI:
https://doi.org/10.64321/jcr.v2i4.45Keywords:
Profit function, Ibom Hotel, Uyo, Electricity Tariff, Profit, NigeriaAbstract
The concern about rising cost of input prices is a major concern to hotel managers across the globe. In this study, we examined the effects of electricity tariff increase on Ibom hotel and Golf Resort’s business profitability in Nigeria. Data for the study was mostly secondary extracted from the company’s annual reports and the company’s engineering department for the periods (2010 – 2023). We applied transcendental logarithmic function to analyze our data and found that, a 10% increase in electricity tariff in Nigeria will dipped Ibom Hotel’s profitability by 41% approximately and highly statistically significant at an instance and that continued increase in electricity tariff in Nigeria will have a reducing spiral effect of approximately 21% continually in Ibom hotel’s profit and statistically significance at one percentage level. We made recommendations based on our findings that reviewing policy on increase in electricity tariff in Nigeria downward will give Ibom hotel and other hotels both in the state and the country time lag to adjust to the energy cost increase and sustain the profit of the hospitality industry over time.
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