… as occupancy, revenue set to hit lowest point
With the closure of the Nnamdi Azikiwe International Airport Abuja on the night of March 8, 2017, hoteliers are already jittering as occupancy rate and revenue nose-dive resulting from the contraction of movement of would-be guests, especially by air, to the Nigerian capital city.
The sad development, which is furthering the impact of the economic recession on the Nigerian hospitality industry, is hitting hard, especially on internationals hotel brands such as Hilton, Sheraton, Marriot, among local brands that target foreign guests with high purchasing power who also make up over 60 percent of their occupancy.
As well, within the six-week closure, hotel occupancy rate, which staggers between 50-40 percent over eight months now, is expected to hit the lowest point of between 20-10 percent, while all revenue targets for the first quarter of the year are unrealistic.
Speaking on the development, Magnus Amah, a hotel manager in Asokoro Abuja, notes that since the economic downturn that has reduced purchasing power and patronage of most Nigerians, the Abuja hospitality market has depended on sustained patronage by foreign guests, and the industry.
According to Amah, it will be witnessing the lowest patronage and revenue within the six weeks closure of the airport because most foreigners have shifted their engagements to Lagos, some have postponed until the repairs at the airport are done, while others will not risk Kaduna due to security and infrastructure related issues.
Pegging occupancy rate in Abuja to an average of 40 percent before the closure, Amah says Abuja hotel occupancy, especially among international brands, is expected to fall more to about 25 percent within the first two weeks of the airport closure.
“International brands are the worst hit because you have to operate 24 hours, spend between N10-30 million monthly on sourcing power, supply your own water, pay all the hotel taxes including the new one introduced by Federal Capital Territory authorities, health and yet import over 50 percent of your raw materials with the high forex. The six weeks is going to be very tough for hotels and businesses in Abuja,” Amah says.
While expressing uncertainty over the immediate impact of the airport closure on Abuja hospitality market, Ikechi Uko, CEO, Akwaaba African Travel Market and hospitality expert, says the contraction of movement to Abuja is imminent and may likely affect hotel occupancy if there are no available and safe alternative transportation options for visitors to Abuja.
Within the six-week airport closure, Uko also notes that the number of corporate meetings and seminars in Abuja will reduce drastically, apart from those originating within Abuja, and hence resulting in less guests, low occupancy, and shortfall in revenue for the hotels.
For Adekola Olaoye, an Abuja hotel manager, the negative impact is also felt by local hotels as the restriction on air movement in and out of Abuja also extended to domestic flights that converge many Nigerians to Abuja for many reasons, especially family, social engagements and official assignments too.
“Considering the poor state of the roads, many prefer to fly and where the roads are good, accidents are common while kidnapping is still real, especially now that many are financially handicapped. So, many Nigerians who are far from Abuja may likely delay their engagements in Abuja until the airport is opened,” Olaoye says.
But while Ethiopian Airlines celebrates it first flight to Kaduna for hitherto Abuja bound passengers, an aviation experts who claims anonymity notes that the aircraft was barely filled as international passengers and especially foreign airlines are still sceptical on using Kaduna Airport, despite several assurance on safety by agencies at the airport and the Nigerian government.
But Shola Adeyemo, public relations manager, Transcorp Hilton Abuja, is hopeful of sustained occupancy as visitors have options of helicopter, train and car hire services from Kaduna Airport to Abuja, besides schedules that are regularly communicated to would-be guests.
However, he explains that the situation will not be like before for the industry until the six weeks airport repair is over.
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