In the last 10 years, the Nigerian hospitality sector has been adjudged burgeoning, especially by promoters of the sector with eyes on attracting more foreign investors and reputable international brands who come with expertise to grow revenue and impact local skills.
The period also witnessed lots of activities, with a new hotel being opened almost every month in the cities of Lagos, Abuja and Port Harcourt, aside the many hotels in the pipeline, raising hope for the expected boost the additional hotels and rooms would give to the industry.
As well, that period saw the likes of Protea springing up everywhere across the country, Best Western putting its logo on any willing property, Golden Tulip wooing hoteliers like never before, African Sun taking on management roles, Sun International reintroducing casino as exciting offering, while Southern Sun (now Tsogo Sun), was the thorn in the flesh of most international brands for crashing hotel room rates in Lagos then.
Much later, Radisson Blu came into the scene with fierce aggression that forced the likes of Hilton and Sheraton brands to play catch-up, having stayed over 20 years without much expansion in the country with just five hotels (Transcorp Hilton Abuja, Sheraton Lagos, Sheraton Abuja, Le Meridien Ibom Hotel and Golf Resort, and Le Meridien Ogeyi Place Port Harcourt) until the aggressive scrambling for market share by the smaller brands.
Today, there are new trends in the industry, which are as a result of the developments in the hospitality landscape, change in guests’ tastes, economic headwinds, among others issues.
First, the acquisition of Protea Group by Marriott International in the first quarter of 2014 made hoteliers across Africa including Nigeria to rethink branding and franchise agreements. The acquisition offered Marriott International additional 10,148 rooms across 116 hotels in seven African countries formerly owned or managed by the South Africa-based Protea Hospitality Group.
The rethinking was because most former Protea Hotel owners thought Marriott International would easily rebrand their hotels to Marriott, but surprisingly Marriott dumped many of the hotels for not meeting its very high standards. In Nigeria, it was only Protea Kuramo Waters in Victoria Island and Protea Select in Alausa Ikeja that scaled the Marriott huddle for branding, out of over 12 hotels in it portfolio before the acquisition.
Following that, a new trend of independent branding and management set in. Many once branded hotel decided to run independently having gained experience from their former managers. The likes of Protea Oakwood became Oakwood Park Hotel, Protea Leadway in Maryland, Lagos rebranded as Leadway Hotel, Protea Westwood Ikoyi rebranded as Westwood Hotel, among others.
Though a few of the former Protea hotels in Nigeria tried to sign new deals with BON, a hotel management company formed by some executives of the defunct Protea Group after the brand was sold, the new manager was considered by many hoteliers as not good enough in terms of standard and branding, hence the hotels chose to be independently managed.
Also, the Golden Tulip brand had its share of brand dumping by Nigerian hotel owners. The 88-room Golden Tulip Enugu was rebranded Golden Royale Hotel when the owner couldn’t see the impact from branding the hotel, the brand also failed in Ibadan with the Owu Crown Hotel, which it branded and lost to Protea, which also left later. As well, Swiss International left its Ajao Estate Lagos hotel, which is now branded as D’ Palms, while the Best Western brand almost disappeared from the many properties it was branding three years after aggressive expansion in Nigeria. Most hoteliers argued that Golden Tulip brand had become common place, especially with its Essentials brand, same as Best Western that can put its logo on a 10-room apartment then.
In January 2018, the rebranding trend took another turn when the 155-room Renaissance Hotel Ikeja, which opened in October 2016, rebranded to Radisson Blu, an unfortunate development for Marriott as the hotel was Marriott’s first push of its Renaissance brand into the sub-Saharan African market, which failed.
Sadly, the 358-room InterContinental Hotel Lagos, which opened in 2013, after long development that saw long period of inactivity left unceremoniously after four years of operation in January 2018, and in that same January, Le Meridien brand, from the stable of Starwood and now Marriott, left Ibom Hotel and Golf Resort.
Since then, the trend of branding and rebranding has become recurring in a larger scale. In 2019, Legacy Group, ceased from managing Wheatbaker Hotel Ikoyi, a development some industry stakeholders think would affect quality, but owners do not think so. A hotel edifice being developed by Sifax Group in Ikeja GRA, which is nearing completion, is rumoured to be branded Marriott. But it may not wear the Marriott logo as other brands are showing interest at managing it better. The Renaissance-Radisson case may repeat itself, and the trend will continue as long as hotel owners seek cheaper managers and huge return on investment.
Aside the recurring branding and rebranding, another interesting trend is the shift to secondary market or mid-market offerings by some international brands.
As government and business activities keep growing in secondary cities, hotel brands are looking at capturing the market. Radisson Hotel Group is leading the way with its Park Inn in Abeokuta among others in the pipeline across some secondary cities in the country. Marriott should ordinarily lead the push in secondary cities because of its long stay in Nigeria through Starwood, but the Four Point By Sheraton Ikot Ekpene, Akwa Ibom State, is yet to take off long after completion.
Aside Park Inn by Radisson in Abeokuta, Four Points by Sheraton Ikot Ekpene, Protea Hotel by Marriott, Owerri Select, Protea Hotel by Marriott Benin City Select Emotan, Golden Tulip Jericho Ibadan, and Golden Tulip Warri Airport, many hoteliers have ongoing projects in cities such as Makurdi, Illorin, Awka, Keffi, Yanegoa, Uyo, Eket, Lafia among other secondary markets.
The development, according to Jemi Alade, a Lagos-based tourism and hospitality expert, is opening huge investment opportunity in mid-market brands and secondary cities to grow their economy.
At the opening of Protea Hotel by Marriott, Owerri Select, Volker Heiden, vice president, Protea Hotels by Marriott, Marriott International, said: “The opening of Protea Hotel by Marriott, Owerri Select, illustrates our confidence in the potential of Nigeria and is in line with our commitment to grow in strategic secondary cities across the continent. The recent expansion of the city’s airport, will give the city better accessibility, which we are confident will further drive business travel.”
Another obvious trend is that many people are now traveling on budget because of the economic realities of the time. Speaking on the budget travel trend, Marvel Akagha, an economist, noted that as purchasing power keeps sliding, mid-market hotels and secondary cities would become attractive to people who are on budget. International brands are also aware of the development and have responded by introducing mid-market brands such as Double Tree by Hilton, Essentials by Golden Tulip, Select by Marriot, Four Points by Marriott, and Park Inn by Radisson, while original mid-market brands such as Best Western, Ibis, among others are expanding.
Following the budget travel trend, more business and corporate executives and even middle class are willing to stay in mid-market hotel brands against the fame for star rated and luxury hotels. The reality now is that budget is key determinant of guests’ choice of hotel.
Aside following the trends, hoteliers, who are also part of the larger society, are driven by the realization that most people are not quick at forgetting the lessons and the impact of the economic meltdown, hence prefer to travel on budget, while many corporate organisations have now made budget travel part of their corporate policy.
But one interesting trend is that many Nigerians are beginning to patronise more indigenous hotel brands as poor standards, insecurity among other issues that guests usually complain about are gradually being addressed.
A good example is the Citi Hotel Group, which runs three hotels in Lekki, Ikeja and Abuja. The indigenous brand has improved on many fronts, leaving guests to testify to its quality offerings and also wooing foreigners.
Citi Height, its latest hotel in Ikeja, is giving the neighboring Sheraton Lagos a run for its money. There are so many of such indigenous brands with quality boutique and luxury offerings across the country today, giving guests competitive options.
Today, five-star is no longer trendy; guests are looking for value for money offerings not minding the brand that is offering it, while many are traveling on budget. However, there is emerging trend for international brands. Going by the InterContinental Hotel Group’s early and unceremoniously exit from the Nigerian hotel market, some international brands like Hyatt, and Wyndham may not be looking Nigeria’s way soon.
However, the Nigerian economy will in a long way determine the trends in the future. The more stable economy means more middle-class with disposable income, improved purchasing power, more fund for hotel investment, more government and private sector patronage of hotels.
But if the above is not the case, a negative trend will set in; dwindling occupancy rate, poor revenue, growing number of abandoned hotel projects and unemployment.
