While things seem to be looking up for the Nigerian hospitality industry, which many think is a burgeoning one, the industry can only boost of a little above 200, 000 supposed standard hotel rooms that at present are really not enough for guests.
Even with the berthing of more international brands that open doors to guests every other day and local brands crawling in a somewhat chase, the rooms are still not yet enough and are regrettably on the high side. The situation gives guests, especially foreigners among them, the cause to assume that their loyalty is not been rewarded accordingly as hotels keep churning out new rooms with even higher rates.
Some who hitherto attribute the high rate to the market forces of less supply for high demand of rooms are having a rethink as more rooms seem available now, but rates are still high.
It also stirs up the hot argument once again that Nigerian hotels are over-priced. But benchmarking the rate against international standard, are they really over-priced.
According to TripAdvisor, a foremost global online hotel search platform, an average standard room goes from between $100 and $200 in most developed economies. But the fact that there are no uniform standard room rates here, leaves hoteliers to charge whatever they like and back it up with claim of installing world-class leisure facilities and high operation cost.
In Abuja, a supposed standard room in an average hotel goes from N20, 000 to N40, 000. Of course, guests cough out more for a night in any of the international brands where payment is preferable in foreign currency.
The situation is not far from the same in Lagos, especially on the Island that is witnessing a somewhat localisation of hotels. But with the too many hotels and more rooms, guests still pay through their nose for a stay in hotels on the highbrow Lagos Island.
There, a standard room in a mushroom hotel goes for as high as N30, 000 per night, explaining the reason why guests pay more for their comfort in the major brands that dot the Island. From Ikoyi, Victoria Island, Lekki and the Ajah corridor, most international brands stand very tall above indigenous ones in both structure and pricing.
But Abiodun Lukmon, a keen hospitality observer, notes that the higher the rates in major hotel, the higher local ones in same location sell their rooms, but at rates they think are alternative or bearable to those who must lodge in hotels on the Island. The fact that those on the Island are expensive does not take away the reality that those on Lagos Mainland are also towing same road.
“If a creepy hotel in Victoria Island charges as high as N30, 000 per night, then the better ones cannot go below N 50,000 per night. It is horrible. In places like Dubai, New York, or Frankfurt, you do not get to pay this kind of prices on hotels that are far better than those shit-holes they offer on the Island,” Lukmon states.
Admitted that power supply and infrastructure are horrible in this country, Omolara Fakeye, a tour operator, says the rates charged by these hotels are outrageous and discourage most of her outbound guests who now find succour elsewhere, in cheap hotels in Ghana.
“Stop the light and water service addition, how can a tourist pay as much as N60,000 per night, almost $350,” she sadly notes.
Bruce Muller, a British IT engineer with a telecom firm in Lagos, regrets that the rates are still high to their disfavour, saying “it is not funny here; with $200, I can get the best outing in hotels abroad. The rates are at least 150 percent higher than a standard room at The Ritz, one of the world’s most exclusive hotels”.
Despite the challenges the hoteliers think they are facing in doing business in Nigeria, the IT engineer says the customers are bearing the whole brunt. “Considering security and work environment, there are no alternatives. Just close your eyes to the rip-off,” he concludes.
Appraising the situation from another perspective, Caleb Ajonumah, a former hotel manager in Abuja and now economics lecturer, explains that the gouging perpetuated by Nigerian hotels is methodical. “The demand of their target market (money-miss-road Nigerians and expatriates concerned about safety) is basically inelastic. They will always have 85 percent+ occupancy rate because there are no alternatives to the almost 350 percent overprice of the likes of Hiltons, Sheratons, among others,” he notes.
However, Nnaemeka Agbasi, CEO, NAC Hospitality, an indigenous hotel management company, explaining from owner/operator perspective, states that Nigerian hotels are not overpriced going by the substantial operational cost incurred in an attempt to maintain standards and satisfy guests.
“Sourcing your own power, water and even security are part of the price to pay for doing business in Nigeria. And you also need to maintain standard and breakeven in order to sustain the business. You need to consider all these challenges before saying Nigerian hotels are overpriced”.
Also, Paul Kavanagh, former general manager, Obudu Mountain Resort, thinks the challenges posed by lack of infrastructure are pilling more than enough pressure on hotel operation across the country. “When you run 24 hours on generating set, source and clean your water, import most of the things you need to retain guest royalty, you stand a risk of running down if the pricing does not cover the operation cost”.
But David Kliegl, general manager, Federal Palace Hotel and Casino, Lagos, explains that operators should not let the guests bear the whole brunt, noting “we have incentives and programmes that are meant to reward guests for their loyalty.
“There are discounts too, access to some facilities without fees among others that are aimed at encouraging patronage. Even the guests know that maintaining quality is not easy and are willing to pay when a hotel is consistent with its quality standards”.
Meanwhile, an anonymous hotel owner is not happy with government’s lackadaisical attitude towards infrastructure development. “If Nigerian hotels are overpriced, the government at all levels should be blamed for neglecting their responsibilities. You collect all manner of taxes and levies and do not even patronise us and also want us to stay in business at minimal cost.
“If actually we are overpriced, it is the only survival measure left to us because we must pay salary and the investors too,” the hotel owner fumes. As more people debate the issue, concerned guests think the way out is for stakeholders to continually pressurise government on infrastructure, tax and probably demand for the establishment of hospitality/tourism development fund, where hoteliers can borrow money at little or no interest to avoid the pressure of servicing bank loans.
Until then, the guests will keep complaining of rip-offs while hotels will also be pushing the blame on the government with no sign of room rates coming down in the nearest future.
OBINNA EMELIKE
