|
Getting your Trinity Audio player ready...
|
In spite of the several assurances from the present administration on addressing security challenges, especially in the northern region of the country, local and foreign investors in the hospitality industry are still reluctant to expand their presence in the region beyond Abuja, the Federal capital territory, which they presume to be safe.
At present, seven foreign hotel brands with over 15 hotels in the northern region of the country are mainly based in Abuja, leaving the rest of the region, especially Kano and Kaduna with indigenously managed independent hotels, which often lack capacity to host high profile guests who demand details of security measures in place for their safety.
Kano and Kaduna seem more peaceful (compared to other areas in the North), yet feasibility studies and investment advice do not encourage hospitality investors to set up there because of the vulnerability of the cities to surprise violent attacks.
The development has resulted in willing investors pulling back, those who cannot wait until the security issues are resolved moving to the southern part, especially Lagos while the more ambitious investors are going further to Ghana, and Gambia.
While some investors from the northern region are ready to invest, most of the international hotel brands argue that their would-be guests still see the region as unsafe, hence cannot assure investors on quick return on their investment as occupancy rate is vital to hotel business.
The development has resulted in Abuja becoming the hub of hospitality investment in the entire northern region with 3,726 hotel rooms in the pipeline after Cairo in the Top 10 Cities by Number of Planned Rooms, according to the Hotel Chain Development Pipelines in Africa 2017, by W Hospitality.
The likes of Radisson Blu, Marriot, Accor, Hilton, among other international hotels brands are eager to expand their presence in the northern region but are only concentrating in Abuja for now.
As well, indigenous hotels are even suffering more as one third of such investments have closed in the region from 2009 till date due to lack of patronage.
At present, only a few hotels are recording slightly above 30 percent occupancy rate in Jos, Plateau State in North Central region, while some have closed down due to dwindling profit that longer sustain the business.
Before the crisis, an average room in Jos was around N10, 000, it fell to N5000 at the height of the crisis. It also improved with relative peace but needs sustained peaceful environment to improve further.
“A right thinking investor will take his investment to Lagos or more peaceful cities where that same room can fetch as much N30,000 per night. We cannot expand our business if we keep having low patronage occasioned by crisis. But government has to go beyond speeches to curtail insecurity so that we can pay our taxes,” Bitrus Yakubu, a hotelier, said.
Collaborating Yakubu’s opinion, Tamwakat Weli, Commissioner of Tourism, Plateau State, said the state is open to investors who have capacity to make its tourism rebound.
However, the clarion call is yet to be answered as most investors still look at the state with further probing eyes.
The commissioner noted that the state is after investors who have capacity to turn around Hill Station Hotel and other tourism assets across the state.
The commissioner assured that the relative peace in the state would be sustained, but the would-be investors are still deterred by some skirmishes that are often reported across the state and its neighbouring states and fearing that same would discourage tourists from visiting.
John Enejo, an Abuja-based hotelier who converted his hotel in Bauchi to a private school due to low patronage, said that a significant proportion of hotel deals in the northern region signed between 2009 and 2014, including his proposed Best Western Kaduna have not progressed beyond the groundbreaking ceremony due to low patronage of the existing hotels occasioned by insecurity.
“As a businessman, I hope to plough back my profit into new projects because bank interest rates are killing. But I cannot continue with the construction of my hotel in Kaduna because there is no money due to low patronage. We need sustained peace to bring back guests to the north because it is still part of Nigeria at large,” he concluded.
OBINNA EMELIKE
