With the successful launch of some top international hotel brands in Nigeria in recent times, more global hotels are now considering the acquisition of indigenous ones to enable them easy and fast access into the attractive Nigerian hospitality market.
Some of the Nigerian hotels being courted by the global brands for acquisition or partnership are Rockview, Orchid, Chelsea and Chesney, which are top indigenous brands.
The move is inspired by the successful experiment of Hilton with Transcorp, Tsogo Sun with Ikoyi Hotel, Sun International with Federal Palace Hotel, and most recently, Marriot with the Protea Group.
The foreign brands are stepping in because of the high return on investment in the Nigerian market, as well as to avoid the stress of registration and documentation, supervising project building and execution, lack of right partners to provide needed funding and the other baggage that comes with starting from foundation.
According to Mitchell Van Dicker, a South African canvasser for an interested international brand, the chase is for top Nigerian hotels which require less work in conversion and upgrade.
Going by the Nigerian Tourism Development Corporation (NTDC) ratings, Rockview Hotel, the biggest indigenous brand with four hotels, Orchid with two hotels, Chelsea with two hotels, Bolingo, Chesney, Soteria, 520 Hotel Group with three hotels, are being targeted by foreign prospectors for space in the Nigerian hospitality market. The unbranded Eko Hotel & Suites, NICON Luxury Hotel Abuja, Tinapa Lakeside, among others are also being considered.
Obidike Ufomba, a hotel expert and CEO of a hotel management company, observes that the present crop of indigenous hotel owners want to be in control of affairs, and hence, run the hotels truly as one-man businesses.
“It will be fine to open talks with owners on the possible sale of their substantial shares, but an outright sale of their hotels will be difficult for now. Hotel business in Nigeria is family business, owners often argue that selling shares to foreign brands means brining people that will sooner or later sack their relations. Yet, standard is still an issue, despite the sumptuous profits they make”, Ufomba said.
But Jonathan Odega, chairman, Orchid Hotel Group thinks the indigenous brands have the capacity to thrive in the face of competition rather than wait for the so-called international brands to swallow them up.
From the success story of his Asaba and Lekki outlets, the chairman is serious at pushing the indigenous brands to other parts of the country and outside Nigeria. With the right personnel, world-class facilities, refreshing product offerings and services, Odega says the hotel brand can stand any international brand. “So why acquisition, when some brands come to learn from you? he asked.
Not denying the lack of competitive edge, Bisi Olabode, hotel manager, buys the idea of acquisitions, as long as the business will improve, standards get better, staff are exposed to world-class skills and paid in line with that as well.
“I once went out with my chairman to a 50-room indigenous hotel in Victoria Island and he cherished the hotel because it is only the name that makes it indigenous, every other thing is world-class. If hotel owners are saying no to foreign brand acquisition, then their hotels across the country should be well-built, well-furnished, rightly staffed and maintained to ensure value for money offering”.
However, foreign brands are still pushing to acquire more, but the few strong brands may be difficult to buy because of the business models the owners have adopted over the years, which allow them do business in their own personal ways.
By: OBINNA EMELIKE
