Nigeria’s hospitality industry is facing the worst challenge in its history as the impact of the coronavirus pandemic continues to spread.
The industry, hitherto adjudged burgeoning, is gasping for breath. Most international hotel chains have shut down their operations and independent and indigenous hotels have toed the same path lately.
Before the shutdown, a drastic business decision taken for the first time in the history of the industry, the rising cases of coronavirus in Nigeria had compelled most international hotel chains in the country to scale down operations to essential services with the hope that business would improve. Hotel occupancy rate had dipped below 30 percent, dwindling further in the week before Easter.
But the lockdown in some major cities across the country and the recent evacuation of some foreigners over fears of coronavirus escalation have further emptied the hotels, leaving hoteliers with scanty guests that cannot sustain their operations. Currently, the industry is at standstill with zero occupancy.
As at Friday, all international brands in Lagos and Abuja had shut down. Big hotels that remained open only served special interests and did not allow entry or exit by guests or employees.
The consequences on the industry are dire. Experts lament that the sector lost over N10 billion in the first quarter of 2020 from low sales and would lose more in the second quarter, starting from the no Easter sales, if the spread of the virus is not curtailed soon.
The experts, however, supported the industry shutdown. Explaining the rationale for the action, they said if a hotel of 100 rooms struggles to run only 20 rooms, it would be a good business decision to close down because the hotel would incur the same operation cost running 20 rooms as it would for 100 rooms.
“Hoteliers are now switching to survival mood and looking at saving their little resources to rebuild the business tomorrow,” one of the experts said.
Speaking from the safety of his home, Simon Ntuli, a general manager at an Abuja-based boutique hotel, said hotels in the nation’s capital shut down because there is no patronage. He said the sector was still reeling from the traditional January lull in business before the pandemic worsened the situation, adding that shutdown was a wise business decision for now.
With the shutdown, the general manager said hotels, which usually made huge sales during Easter period, are out of business amid bleak celebration this year.
“There are no bookings, the earlier ones we had have been cancelled by clients. No hotel should expect guests with the lockdown. No guest wants to die, so potential guests are all hiding for safety now,” Ntuli said.
He said an average hotel in Abuja would have made at least N10 million sales from Easter promotions this year, while the likes of Hilton and Sheraton would have made N100 million or more.
Marcel Agada, a sales director in an international branded hotel in Lagos, disclosed that for the first time, guests were not interested in the hotel’s Easter promotion package.
“We had to withdraw the fun-loaded and heavily discounted Easter package three weeks ago when we had several cancellations from guests. We would have made at least N50 million from the Easter sales,” Agada said.
He noted that the room was the major offering of the promo and when potential guests were cancelling their room bookings, there was no business to pursue again.
Aside from empty resorts, beaches and parks – an unusual occurrence on an Easter weekend – the likes of Hilton, Federal Palace, Eko Hotel, Sheraton, Radisson Blu, among others that offered sumptuous Easter brunch and dinner in the past may not be expecting guests this year as would-be guests prioritise their safety.
While the envisage losses will be huge, an executive at Radison Blu, who pleaded for anonymity, said revenue loss should not bother the industry now because every other sector is impacted as well. He advised that hoteliers should focus on rebuilding after the virus scourge and also be willing to draw resources from their earlier earnings to make it work.
Ntuli corroborated, saying business in the aftermath of coronavirus should be hoteliers’ major concern now.
“Hotel owners have made huge earnings during the boom, now they are challenged to sacrifice, but it will not be easy as job losses are imminent,” he said. Related News
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