• Thursday, March 28, 2024
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Nigerian hospitality industry records worst half year in history

Nigerian hospitality industry

The once-thriving Nigerian hospitality industry has recorded the worst half-year performance in a long while. In the half year (H1) of 2020, the industry recorded the worst decline in occupancy and revenue.

While occupancy rate hovered between 30 percent and 40 percent in the first quarter due to the traditional lull in business associated with the New Year period, it declined from 30 percent in early March to zero occupancy during the five-week lockdown imposed by the Federal Government to curb the spread of coronavirus (COVID-19).

Sadly, the industry lost around N2 billion daily during the five-week lockdown, according to data from the Federation of Tourism Association of Nigeria (FTAN), and more afterwards.

Meanwhile, hoteliers, brand and franchise owners, and destinations managers decry that the industry has lost over N50 billion in the first half of 2020, with many projects under construction at the risk of abandonment.

Moreover, some industry experts laments that the sector lost over N10 billion in the first quarter of 2020 from low sales and even more in the second quarter, especially with the no sales for the Easter period across major brands, which was unprecedented in the history of the industry.

According to Simon Ntuli, a general manager of an Abuja-based boutique hotel, the loss is huge across the two quarters as an average hotel in Abuja would have made at least N10 million sales from the botched  Easter promotions this year, while the likes of Hilton and Sheraton could make from N50 million.

Comparing the first half of 2019 and 2020, Ntuli notes that occupancy averaged 70 percent this time last year, with most hotels meeting their half-year revenue target despite that it was an election year.

For Shola Adeyemo, former sales and public relations manager at Transcorp Hilton Hotel Abuja, the low sales during the Easter period and the second quarter of 2020 were unprecedented in his over two decades in the hospitality industry, amid huge losses.

Adeyemo notes that the decline was historic because the industry has never gone down the level it went in the first half of 2020, saying, “During Ebola and economic recession, the industry was hard hit as well, we managed to stay afloat.

“But coronavirus took the industry unaware with the travel restrictions and lockdown that resulted in no travel, no guest, zero occupancy and shutting down operations for the first time in the industry history. We can only experience total shutdown during war.”

Trevor Ward, CEO, W Hospitality, foremost hospitality consultancy company, blames the huge decline in the first half of 2020 on the impact of coronavirus on hospitality business in Nigeria, especially as government  ordered hotels to close, domestic and international flights stopped operating, as well as, no inter-state road travel.

Though the impact of the pandemic differs from country to country, Ward notes that Africa and Nigeria have fared much worse than the USA, but about the same as Europe at the peak of the lockdown. “STR Global released some statistics weeks ago that said that whilst in the USA 17 percent of hotels had closed, and the balance were achieving 37 percent room occupancy, in Africa 80 percent were closed and those still trading were achieving 14 percent occupancy – a huge difference,” he says.

Looking forward to the second half of the year, most hoteliers think that the performance would be slightly above the first half as recovery is very slow. At present, the industry occupancy is averaging 10 percent, a very poor performance that is forcing many hotels that are opened to reconsider closing down again due to the high cost of operation for servicing few guests.

According to the W Hospitality CEO, it is going to be a slow recovery for the industry, starting from the second half of the year. “It could take as much as 4 to 6 years to get back to 2019 levels of business, but in reality we do not know, we have never been in this situation before. There will be really tough times for the staff no longer required and for their families,” he states.

In the same vein, Peter Idoko, general manager, Legend Hotel Lagos Airport Curio Collection by Hilton, thinks recovery would be slow because hotels depend on travel, particularly air travel, for their customers, and international flights are yet to resume in Nigeria.

Beyond delayed international flights resumption, Idoko thinks that potential guests may drag their feet to travel soon over health and safety concerns, except some wanderlust among them, who are willing to take risk based on safety assurances from the hotels.

Brain Efe, general manager, Ibom Hotel and Golf Resort, decries that patronage has not been good in a long while, especially as meetings incentives conferences and events (MICE), which is the mainstay of the resort scarcely happen now due to social distancing and other safety protocols aimed at curtailing the spread of the pandemic.