Hotels and Restaurants Register a Rise in Producer Price Index

There has been a rise in the overall producer price index for hotels and restaurants by 1.9% in the fourth quarter of the financial year 2015/16, relative to the fourth quarter of financial year 2014/15.

Hotels and Restaurants Register a Rise in Producer Price Index
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There has been a rise in the overall producer price index for hotels and restaurants by 1.9% in the fourth quarter of the financial year 2015/16, relative to the fourth quarter of financial year 2014/15.

This was revealed by David Ssenyonjo a statistician with the Uganda bureau of statistics this morning, while releasing the producer price indices of hotels and restaurants for the fourth quarter of April to June 2015/16 financial year.

Producer price indices- PPI, measures the average change in the price that hotel and restaurant service providers receive for their services.

It focuses only on the formal sector of the hotels and restaurants with total sales of at least 10 million shillings per month.

The outputs are categorized with percentage contribution to the index by different services; accommodation – 44%, conference facilities – 14%, food – 29% and drinks – 13%.

The rise in PPI was triggered by fluctuations in the foreign exchange market as most hotels charge accommodation in dollars, seasonality effects where there are low and high activity periods and subsequent promotions to boast service demand. ‘Promotions are sometimes carried out in response to industry competition and major events.’

However, the catering service prices are driven by inflationary tendencies though with lags, consumer taste preferences and packaging- buffets. Some menus prices change due to availability of inputs.

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