Increasingly, investor confidence and interest have continued to grow in Nigeria with many hoteliers of international brand looking to capitalise on the country’s emerging economy.
Analysts say that the country’s approximately 7 percent annual GDP growth is benefiting from the shrinking economy of the Western world and, according to Emeka Eleh, president, Nigerian Institution of Estate Surveyors and Valuers, sub-Saharan Africa, particularly Nigeria, is growing faster than the rest of the world because it has more opportunities.
Nigeria is the most populated country in Africa with about 160 million people. It is benefiting from a highly urbanising environment estimated to be about 50 percent of the population, and also from a young population of around 18 years old. With this and its oil wealth, the country is experiencing an influx of global investment.
David Grossniklaus, a global economic analyst, reveals that hotel demand in Lagos, Nigeria’s commercial nerve centre, increased by 7.3 percent in 2012, quoting W Hospitality that predicted that 5,000 new hotel rooms are to open in Nigeria by 2017.
Grossniklaus also quotes City Mayors as saying that Lagos is one of the fastest growing cities in Africa, adding that the city has seen a swell of new openings and developments as global hotel chains capitalise on demand from a number of regional and intra-African trade operations headquartered in Lagos.
STR Global, sister company of HotelNewsNow.com, affirms that hotel demand in Lagos increased 7.3 percent during 2012, adding that supply growth during the same period went up 6 percent.
In 2012, a number of new hotels opened in Lagos and these included the Four Points by Sheraton Lagos; Ibis Lagos Airport; Best Western, and the Radisson Blu Anchorage.
Many more hotels are in the pipeline and these are being promoted by Carlson Rezidor Hotel Group, Hilton Worldwide, InterContinental Hotel Group, Starwood Hotels & Resorts Worldwide, Hyatt Hotels Corporation, and Protea.
Hotel supply is likely to grow by 61.4 percent in Lagos and 26.7 percent in Abuja, according to STR Global’s February 2013 pipeline data, pointing out that Abuja, the second largest hotel market in the country, has seen little change in hotel supply since 2010, while year-to-date March demand growth decreased 1.3 percent.
Grossniklaus points out that during the first two months of 2013, supply growth in Lagos remained relatively unchanged while demand increased 13.6 percent
With increased competition in the Lagos hotel market, average-daily-rate growth in local currency remained fairly unchanged in 2012 and first quarter of 2013; occupancy rate in 2012 was up only 1.3 percent.
Of the 5,000 hotel rooms expected in 2017, W Hospitality says the largest concentration will occur in the Ikeja neighbourhood, adding that about 44.3 percent increase is projected in the new supply to this area, to be followed by Victoria Island, which is expected to see about 34.6 percent increase.
“Our experience has shown that construction delays and funding often reduce the number of projects being fully delivered. We estimate that only 25 percent of the projects in the pipeline is considered to be ‘definite’ for completion,” Trevor Ward, W Hospitality’s managing director, observes.
The company adds that in addition to traditional business-oriented hotels, a number of smaller-scale projects also have been announced in Nigeria such as the two boutique properties from Mantis Hotels.
CHUKA UROKO
