For hotels in Nigeria to compete favourably with her counterparts in the developed world and possibly attract genuine investments, government must improve on infrastructures, collaborate with hotels and airline businesses and devise modern marketing initiative for the country’s tourism OLATUNDE OLULOYE, former managing director Suru Suites & Hotels Limited and Executive Director, Best Western Plus Lagos Ikeja Hotel told Travel Mate in this interview. Excerpts:
Q: Could you attempt an analysis of the hotel business in Nigeria?
A: The hotel business is a must for any country being one of the tourists’ products that contributes meaningfully to the growth and development of the economy of any country. When you talk about the economy of a country, you would definitely mention key areas such as investment, production and all facets of revenue accruing businesses including the recreational sector where the hotel business belongs. This by implication means that visitors coming into that country could either want to transact business or engage in meaningful discussions with certain people or businessmen. And in doing so, they would to stay in a comfortable place within the period of their sojourn. So, the state of the hotel is inversely proportional to the state of the economy of whichever country in question. This is why it is important that countries make effort at improving the recreational sector. And thank God today, transnational hotels are rediscovering the growth potential of Nigeria and coming in trickles to invest in recreation thus reassuring the world that Nigeria has the equivalent of whatever are your needs in the recreation business. And if I may also emphasize that the hotel business isn’t an all comers affair. It is a long-term investment. It isn’t a business you begin and make profit in a year or two. Its gestation period can be very long unlike other businesses. So beginners or investors need to hire the services of experts in this area. Ironically, our banks aren’t used to long-term borrowing thus complicating hotel business.
Q: Would you against this backdrop say the hotel in Nigeria has come of age?
A: Certainly no. Like I said, hotel is a reflection of the economy of the country. If you take a look at Nigeria today, we have just about three transnational chain-managed hotels; the Sheraton Hotels, Eko Le Meridien now Eko Hotel & Suites and the Hilton. These hotels are international standard and they deliver quality service and provide the right amenities needed in the hotel industry. So, I wouldn’t say the hotel industry has come of age but it is just beginning to take its place in the business setting. Imagine how fast hotels are springing up in places like Port-Harcourt, Abuja and Lagos implying that the time has come for hotels in Nigeria to imbibe international standards. The coming of transnational hotels is also a symbol of an evolving economy that is up to a good start – a criterion that could further send signal to foreign investors that the Nigerian economy is sprouting.
Q: Is the hotel market saturated?
A: The market isn’t saturated. Recent statistics has shown an upward movement of people into Nigeria especially foreign business, which isn’t less than five to seven percent within the last two to three years. This may not be unconnected to the relative stability in the polity. Coupled with this is a renewed conviction in the Nigerian economy; that foreigners can invest in Nigeria without much ado and that when they come, they could find good hotels of international standard to stay. So, the influx of foreign investments to Nigeria has placed high demand for bedrooms especially in Lagos, Port-Harcourt and Abuja. The market isn’t saturated because the current bedrooms in Nigerian hotels cannot yet meet the growing demand of guests, which again suggest why more guest houses that may be classified as three-star hotels are springing up in cities around Nigeria.
Q: What with the BestWestern Hotel brand?
A: Best Western is an American brand. We are new in Nigeria. There are two BestWestern Hotels in Lagos; the Lagos-Ikeja hotel and the Island hotel, Victoria Island. Coupled with these are the BestWestern Hotels in Benin City and Port-Harcourt. These hotel chains all came up in just one year. And for real, Best Western is the world’s largest hotel chain. The hotel has three categories: Core brand, Plus and Premier brands. The 112 – bedroom Best Western Lagos-Ikeja hotel came in as a Core brand and in a spate one year; we were elevated to the Plus brand which is the equivalent of Four-Star hotel. We are the first to attain this standard in Africa, though there is a Premier brand in Ghana. Premier is the equivalent of a Five-Star hotel.
Q: Have you plans to consolidate on this accomlishment for future gains?
A: We have plans to expand our frontiers by at least building one three-star hotel in every viable state capital in Nigeria. This plan may not come easy especially now that the country is beleaguered by economic challenges making it rather difficult for banks to finance long term projects. But by the time all is right, we will consolidate on our gains. However, we are building 240-bedroom hotel along Opebi in Ikeja Lagos. When completed, it will be one of the stables of Suru Suites and Hotels Limited. Aside this, we have other brands which are in the grouping of budget hotels. It will cater for the average need of any guest who wants an accommodation devoid of the luxury hotel-like structure. Each would have 20 to 25 bedrooms basically to provide accommodation for guests who need budget cottage.
Q: How would you react to allegations that hotels in Nigeria rarely market tourism?
A: We should ask ourselves if we have a tourism master plan. No we don’t. The hotel is a product that enhances tourism that is providing tourists where to stay. Yes, we may be lacking information but that does not literarily means we don’t promote tourism. The tourism board should collaborate with the hotels to build a synergy to market tourism. So, there is a need for the tourism board, hotels and airline industry to come together to chart a course for tourism.
Q: Local hotel rates have also being a basis of dispute?
A: Recently, I was in the UK where it was debated that a bedroom that ordinarily could price for between 70 Pounds and 100 Pounds in the UK are rated between $200 and $400 in Nigeria. There isn’t basis for compares I argued particularly when you compare the cost of building a hotel in Nigeria and in Johannesburg, South Africa for instance. It cost so much less to build in Johannesburg than in Lagos. And while you are responsible for the provision of basic infrastructures in Nigeria, government in South Africa provides virtually all key infrastructures that the hotel would need to operate effectively. For example, before you get approval to build a hotel in Johannesburg, government would have made necessary provisions to provide infrastructures to the proposed site of the hotel. Whereas, in Nigeria, you the investor is bothered with land approval, multiple taxes, water, power, sewage treatment and much more. The cost of building one hotel in Nigeria could in relative term build two or three hotels in Los Angeles, USA. While the average cost per room for a three-star hotel facility in South Africa is about $75, 000, same facility could attract about $151, 000. So what do we do? The cost is transferred to the room rate. Here at BestWestern Plus Lagos-Ikeja, we have our sewage treatment system plant, whereas in South Africa, government is responsible for taking care of waste generated. That notwithstanding, we provide security at the hotel at an exorbitant cost. These are some reasons why rates of hotels in Nigeria contrast sharply with those abroad.
Q: And how do you relax?
A: We work, work and work. Remember, we are just going to be one year old and we can’t afford to take chances. The level of work here does not yet give room for rest. Perhaps on Sundays after church service, I read the scriptures, thereafter eat good food, sleep and get ready for the next working day. And there we go again.