No festive bounce for hoteliers, tourism businesses as sales hit lowest on record

There is no shaking off the impact of the coronavirus pandemic for hoteliers and other tourism businesses in Nigeria who are facing the worst festive sales on record this year.

While the industry recorded over N10 billion from festive season sales in 2019, industry sources worry that festive sales may slump to as low as N3 billion this year due to guests and travellers’ apathy occasioned by the pandemic, insecurity and high cost of travelling, many Covid-19 tests by Nigerian Diaspora, among other challenges.

The hotel and hospitality sector has not expanded this year and even slipped into a recession in the second quarter, three months before the entire economy followed. The sector contracted by 2.99 percent in the first quarter and a record 40 percent in the second quarter, reflecting the impact of the pandemic. Although the contraction reduced in the third quarter, it was still as high as 22.6 percent.

In only a week to Christmas, hotel occupancy is down to 20 percent from an average of between 40 and 50 percent in October and November, according to industry sources, who are blaming the development on the recent rapid rise of coronavirus cases across Nigeria.

That means any hope of using the festive period, which is typically accompanied by higher sales, to soften the impact of the pandemic on the sector has been dashed.

Relief may not come early enough with the industry bracing for a traditional lull in business between January and February.

Tour operators and travel agencies are also suffering from the decline as most people defer travelling till 2021, while those who dare to travel are scared by the high cost of flight tickets and Covid-19 tests.

Simon Ntuli, a general manager of an Abuja-based boutique hotel, says the industry will be badly hit by the huge decline in festive sales this year, noting, “An average hotel in Abuja lost at least N10 million sales from the botched Easter promotions this year, and we are already losing double that amount because of the poor festive season sales this year. Guests are not booking as usual.”

Hogan Aduje, a hotel owner and business mogul who has bank debt on his neck, decries that revenue has never improved this year since the lockdown as the country keeps experiencing one challenge or the other that keeps would-be guests away.

For him, the less 30 percent occupancy in this December can hardly sustain the business in a period that hotels should have been in boom.

“We used to make close to N12 million every month, but we barely make N5 million nowadays due to poor sales. I see the industry losing more in the second half of this year than the N100 billion it lost in the first half because nothing has improved since then, and we are rather redirecting the small revenue in running more costs in the hotel. I fear that the banks will soon be calling for their money,” Aduje laments.

Emmanuel Ele, general manager, Five Seasons Hotels, blames the unprecedented poor festive sales on the no travel decision by the Nigerian Diasporas, who usually make bulk of the festive bookings.

“Most of our clients are not booking for the usual homecoming this festive season because of insecurity, the pandemic and stress of travelling from abroad now. One particular would-be guest cited the many Covid-19 tests at different airports as excuse, others are scared of visiting now that kidnapping and banditry are on the rise,” Ele says.

Though the Nigerian airspace is open, some hotel experts think that the second lockdown in some European countries due to the second wave of the pandemic, the many Covid-19 tests, and the difficulty in connecting flights now are responsible for the travel apathy by many Nigerian Diasporas who usually visit during the festive season.

However, Peter Idoko, general manager, Legend Hotel Lagos Airport Curio Collection by Hilton, still believes guests will come, especially considering the wonderful festive season packages and rates by some good hotels aimed at boosting patronage.

Considering the development, many industry experts warn that stakeholders should brace up for a tougher 2021.

It would be recalled that in the first half of 2020, the industry recorded the worst decline in occupancy and revenue. While occupancy rate hovered between 30 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 late March to zero occupancy during the five-week lockdown imposed by the Federal Government to curb the spread of Covid-19.

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