Barely 16 days after the closure of the Abuja airport for runway repairs, the hospitality sector in Nigeria’s capital city is dipping to its lowest point, as occupancy has dropped to between 30 and 40 percent from an average of 60 percent before the airport closure.
Already, hotel operators have expressed concern that the occupancy rate could drop even further, if subsisting foreign guests start departing as the number of new guests coming to town keeps dropping by the day.
The situation is further compounded by the fact that most of the international airlines which hitherto flew into Abuja with foreign passengers who made up 60 percent of hotel guests in Abuja, have refused to fly in through Kaduna, which has been designated as alternate airport for Abuja in the course of the runway repairs. The objecting airlines cite security concerns.
To add to the hotels’ pains, the Buhari administration’s clampdown on frivolous expenditure has made the remaining 40 percent domestic patronage of the hospitality sector in Abuja difficult, as government ministries, parastatals and agencies that run on low budgets, now hold little or no events, putting a dent on patronage to the hospitality sector.
At present, the likes of Transcorp Hilton Abuja and Sheraton Abuja Hotel, do 30 and 40 percent occupancy respectively. Going by their 667 and 575 rooms respectively, so far, both hotels are parading over 200 empty rooms each, daily, while the total number of empty hotel rooms in Abuja since the closure of the airport, has risen to over 1,800 from about 1,200. Abuja is estimated to have about 3,000 standard hotel rooms.
Speaking on the impact of the airport closure after 16 days, Victor Edosomwan, principal consultant to two indigenous hotels in Abuja, observes that occupancy has dropped to 30 percent in the last two weeks and is expected to drop further because Abuja is a conference destination and most visitors, especially foreign guests, have called off or rescheduled such appointments and events, until the repairs are over.
“Most foreign airlines have refused to fly in visitors through Kaduna, resulting in empty rooms across all hotels in Abuja. Furthermore, government patronage of hotels has reduced to 20 percent, due to the clampdown on expenditure, yet the cost of running these hotels has not reduced. They still pay taxes and maintain their daily operations, even within the six weeks the airport runway repairs is expected to last”, Edosamwan said.
He lamented that one of the hotels he consults for, recently lost a good deal with the Federal Inland Revenue Services, while another deal with Pencom was moved to April, with the hope that the airport would have re-opened before then.
Besides the two hotels, most hotels in Abuja now experience multiple booking and reservation cancellations and postponement of events, which dampen their daily operations and earnings.
Describing the situation as the worst so far in the hospitality sector in Abuja, Marcel Handel, a general manager of an Asokoro, Abuja-based three-star hotel, explained that even Non-Governmental Organisations (NGOs), the second biggest patrons of hotels, especially with lots of foreign collaborated events, have pulled back because their facilitators are scared of coming in through Kaduna for security reasons, while their local partners insist on rescheduling events until the Abuja airport is re-opened.
According to the manager, hoteliers are seeking creative ways to scale up patronage and scale down cost, to enhance margins. “I don’t know why they allowed the airport to rundown so much; with less than 30 percent occupancy, we are nearing a stage of closing down the hotels. We are bearing the brunt alone. I expect tax relief or even rebate for hoteliers within these six weeks that our business is down, but no one will listen to us”, Handel lamented.
Handel noted that if occupancy drops below 30 percent, most hotels would be forced to lay off staff, especially casual ones and those on internship, or send some senior ones on unpaid leave until the situation improves.
Quantifying the loss so far, Handel noted that the Abuja hospitality industry is losing over N30 million daily and over N500 million for the 16 days the airport has been closed and that the figure would likely double if occupancy keeps dropping in the coming weeks.
However, Shola Adeyemo, PR manager, Transcorp Hilton Hotel, Abuja, insists that the situation will get better and that what matters most, is the way hotels manage the fallout of the closure.
In the same vein, Ikechi Uko, CEO, Akwaaba African Market, noted that Lagos hoteliers survived the Ebola virus outbreak which lasted for three months and emptied hotel rooms, and that in like manner, the Abuja hotel business will rebound after the six-weeks airport runway repairs. The Minister of State for Transportation, Hadi Sirika, in a twitter post on Thursday, assured that the Abuja runway repairs is going according to plan and that it would not go beyond the six weeks promised.
OBINNA EMELIKE
