Nigeria’s hotel industry achieved double-digit growth in 2017 with increasing foreign and domestic travellers reinforcing the sector’s potential for growth.
In a PwC report on hospitality in Africa released yesterday, titled Hotels Fact 2018-2022, Nigeria recorded the largest forecasted expansion in the hotels market compared to other African countries.
According to the report, “the Nigerian market grew by 11.7% in 2017 and we forecast that it will continue to grow at a 12.6% compound annual growth rate over the next five years. For the forecast period as a whole, the number of available rooms in Nigeria will rise from 9,700 in 2017 to 12,600 in 2022.”
With the Nigerian economy recovering from recession, previously abandoned projects have begun to bounce back and occupancy rates are equally favourable in the hotel markets responding to the economic recovery.
“Tourism to the African continent has proven to be resilient in the face of economic and political uncertainty, impacts of droughts and other regulatory changes. The opportunities are aplenty for this industry to enjoy further growth albeit at a more modest pace,” Pietro Calicchio, Hospitality Industry Leader, PwC Southern Africa said.
“However, as we continue to see there are also a number of challenges facing each country. This is an industry that is reactive to the smallest change in political, regulatory, safety and sustainability matters.” Pietro said. The hotel markets in Nigeria recorded an increase in guest nights by 6.7 percent in 2017, the first increase since 2013, as economic conditions stabilised and confidence in business increased. With the Nigerian economy based on oil, falling oil prices led to a slowdown in economic growth in 2015, followed by a 1.6 percent decline in 2016 that persisted through the first quarter of 2017.
The domestic economy is the key driver of tourism in Nigeria, with 97 percent of tourist spending in Nigeria in 2017 having been generated by domestic travellers. Amongst the countries sampled in the report, Nigeria has the smallest percentage contribution to GDP of about 5 percent.
Despite these impediments, Nigeria remains an attractive market for international hotel brands because of its large economy. Based on the PwC report, Hilton, Marriott, Westin, Sheraton, Radisson and Best Western are scheduled to open new hotels in Nigeria during the next five years
Jemi Alade, CEO, Jemi Alade Tours, told BusinessDay, “a lot of people are scrambling for the Nigerian market now. The hotel industry is looking favourable because the market is big and everybody wants to have a niche in the market so most international hotels are looking at Nigeria for growth to expand in the West African sub region.”
The tourism market in Nigeria is expanding with the emergence of the Eko Atlantic Project and other ongoing projects in the Pipeline, hence, the need for expansion through partnerships and Foreign Direct Investment (FDI).
“Majority of the top hotels are coming in with projects and most of them are partnering with Nigeria hotels while some are coming in to invest directly and build their own brand in the country so there is room for expansion because most of the cities are yet to have international standard hotels,” Jemi said.
Source: Business Day