Despite infrastructural challenges, security issues, unstable stock performance in the Nigerian Stock Exchange, the hospitality segment of the economy continues to show promise by the influx of foreign and local customers in the central business districts of Lagos, Port Harcourt and Abuja. A positive outlook owing to a set of factors including an attractive demographic profile, stable economic growth from 5.4% in 2013 to 6.3% in 2014. Further, an increasing purchasing power parity put at $5,710 in 2014 (World Bank, 2014) from has also contributed to the positive outlook. Purchasing power parity or GNI per capita means, in simple terms, the average value of goods and services produced within a country plus revenues earned abroad. Most hotel bookings are usually for corporate and political events in cities like Lagos and Abuja.
Hospitality is particularly strong in the Southern parts of Nigeria compared to the North which is affected by heightened security threat from terrorism, social strife and harsh weather conditions. Annual festivals, urban planning, wildlife attractions and cultural events have boosted tourism in Calabar and therefore spurred increased hotel reservations especially during the festive season. A ranking of top 5 searched locations by customers according to a 2015 Hospitality report by Jovago shows that Lagos has 61.42%; Abuja, 18.60%; Port Harcourt, 7.33%; Ibadan, 7.27%; and Calabar, 5.30%. E-commerce sites like Jovago and WakaNow have contributed to streamlining hotel reservations and increasing visibility for listed hotels.
The rise in state of the art architecture, modern building designs and improved hotel facilities marked the beginning of luxurious accommodations in the real estate market space. Demand for luxury hotels is seen in Lagos and Abuja. WTTC Travel and Tourism Economic Impact report 2015 shows that business and leisure spending accounts for 46.9% and 53.1% of total spending in Nigeria. Government has also contributed to improving quality standards in property management and hotel services. According to Marek Zmysłowski, Managing Director, Jovago Nigeria, “the Lagos state government has officially introduced a license that appropriately rates hotels. Right now, if your hotel is 5 star or 4 star or 1 star, the classification is given only after specific inspection has been carried out. And this is good for business because it fosters transparency”.
Nigeria is already becoming recognized in Africa’s growing tourism market. There is need to tackle challenges of security, property management, government support and availability of capital for increased growth in this sector.
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