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Passenger traffic into the country and hotel occupancy rates are picking up again, affirming the increasing optimism that the worst days of the Nigerian economy are behind it.
From a low point of between 15 to 30 per cent sustained over the months, hotel occupancy is beginning to pick up to an average of 40 percent across the hospitality sector in Nigeria, as foreign passengers stage a gradual return to the country.
The increase in passenger traffic and hotel occupancy has been linked to the noticeable increase in economic activities in the real sector of the Nigerian economy, with a significant pick up in manufacturing activities.
Purchasing Managers Index (PMI) figures released by the Central Bank of Nigeria (CBN) on Thursday, for May, which stood at 52.5 index points, from 51.1-index point in April, indicated expansion in the manufacturing sector for the second consecutive month, further boosting the signs of economic recovery.
The increase in the PMI was driven by a faster growth in new orders and raw material inventories; employment level recovering from contraction; and supplier delivery time moderating, according to the CBN.
Also 10 of the 16 sub-sectors monitored by the CBN reported growth in May, while six sub-sectors declined, indicating that more sectors of the economy are showing signs of growth.
Furthermore, the production level index for the manufacturing sector expanded for the third consecutive month, to May 2017 while 15 manufacturing sub-sectors recorded increase in production level during the review month, including primary metal; electrical equipment; petroleum and coal products; cement; chemical and pharmaceutical products; plastics and rubber products; computer and electronic products; food, beverage and tobacco products; textile, apparel, leather and footwear; appliances and components; paper products; non-metallic mineral products; furniture and related products; printing and related support activities and fabricated metal products, while the transportation equipment sub-sector recorded decline in production.
Employment level index in May 2017 stood at 50.7 points, indicating growth in employment level after 26 consecutive months of contraction in employment.
Even though a similar PMI index measured by FBNQuest showed a decline to 54 points in May, from 58.9 points in May, it still remained in strong positive territory.
BusinessDay investigations show that the growth in the real sector of the economy is translating into higher occupancy rates in major hotels in Nigeria’s business and political hubs of Lagos, Abuja and Port Harcourt, as they welcomed more international passengers in the first and second quarters of this year, than in the same period in the previous year.
Passengers, mainly from Asia, the Middle East and Europe, are streaming back into the country, while South Africa leads other African countries.
While Nigeria received 3,272,331 foreign passengers between January and September last year, it has welcomed almost 1 million passengers since January 2017 and will likely surpass the 33,099 international flights last year, to over 35,000 flights, as countries such as UAE, the Netherlands, Turkey, Qatar, Cote d’ Ivoire, among others, are requesting for additional flight frequencies.
Explaining the rational for the increase in foreign passengers’ traffic, Muhtar Usman, director-general, Nigerian Civil Aviation Authority (NCAA), noted that the increase in passenger volume is anticipated annually, and the fact is authenticated by the request for additional frequencies by some foreign carriers.
Edward Osahele, an economist and consultant, attributed the positive development to the fact that the Nigerian economy is set to rebound from months of recession, giving proactive businesses, especially foreign direct investors reason to return and position for the impending boom.
“The stability in oil price, the improving fortunes of the naira against the US dollar, occasioned by the new Central Bank of Nigeria forex window, which has encouraged investors, stability in government, as Yemi Osibajo, acting president, has proven he can handle the affairs of the country, even in the absence of the President, improved security among others, have combined to set the economy on the growth path again. “So, the growing international passengers’ traffic and increasing hotel occupancy is expected. But sustenance is the watchword for any improvement in the economy now”, Osahele warned.
Also Ikechi Uko, CEO, Akwaaba African Travel Market and Nigerian travel expert, noted that the request in additional frequencies by some airlines is a signal that business is beginning to pick up once again and is set to boom in no distant time.
Uko also noted that the soaring international passenger traffic, especially after the successful renovation of the Abuja airport runway, has brought back the hospitality business in Abuja from coma.
Corroborating Uko’s views, Shola Adeyemo, public relations manager of Transcorp Hilton Hotel Abuja, noted that the flow of guests has resumed fully in the five-star hotel, with occupancy well over 60 percent.
“We have hosted international conferences back to back, unlike in the last two months. Things are picking up now and we are happy the industry is back to normal again. The timely re-opening of the Abuja airport, after the runway repairs is another boost to passenger confidence and would-be guests”, Adeyemo said.
As well, Maurice Ebiye, general manager of a Wuse Abuja-based hotel, noted that most hotels in Abuja are now recalling their casual staff who were sacked, contractors and even expatriate staff who went on holiday, while the six-week airport renovation lasted. This is because a resurgence of activity across hotels in Abuja.
“We have recalled 20 casual staff, two expatriates and re-engaged five suppliers because business has picked up. We run about 40 percent occupancy now, unlike below 20 percent during the airport runway renovation. We have also hosted three out of the five international seminars that were postponed because of the airport closure”, the general manager said.
The likes of InterContinental Hotel Lagos, Eko Hotel and Suites, Federal Palace Hotel, Southern Sun, Golden Tulip Port Harcourt, Le Meridien Port Harcourt among others, are experiencing increasing bookings from foreign clients, while the era of multiple events, seminars and workshops per day are returning.
Federal Palace Hotel Lagos, managed by Sun International; a South African brand, is reaping multiple events and soaring occupancy, as most South African businesses are back, after moments of watching the Nigerian economy stabilise.
OBINNA EMELIKE and Hope Moses-Ashike
