Brian Efa is the CEO of Courtyard By Celsius, an indigenous hospitality brand, which is making waves in the short-let apartment segment. In this interview, Efa, an astute hospitality expert with over 20 years experience across major hotel brands.
Why is the demand for short-let apartment accommodation booming in Nigeria now?
More travelers are opting for short- let apartments, especially for long stay guests. The demand for this accommodation segment is increasing rapidly and house owners are making huge returns on their investments.
Also, because of the increasing need for privacy and security by high-profile individuals who want to avoid conventional hotel accommodation. Considering that growing demand, a short-let apartment becomes an alternative for such clients.
How big is your shortlet apartment portfolio across the country?
The number of shortlet apartments is gradually increasing, especially in Lagos, Abuja and Port Harcourt. The increase is because of the nature of its operation, but it is difficult to tell the numbers. In line with that development, we are building the first short-let accommodation chain in Nigeria so that investors can sign up with our brand for management or franchise agreement. This way, we can begin to aggregate the number and give more credibility to the segment. In return, the clientele will begin to soar because people will become more comfortable dealing with us. You know people feel more comfortable and safer dealing with corporate organisations than with individuals.
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How does it work, if one wishes to offer his property for the business?
If you have a property in any major city in Nigeria, there are three ways to be part of our short-let chain. Before then, you have to meet certain criteria to be listed. Once the criteria has been met, you will then decide what option best fits you.
The three options are: Management Contract– where we manage the apartment for you and you per us management fees, and Franchise – where you manage it yourself, we do the promotion and setup and you will only pay the franchise fees. The third option is outright leasing of the property. In this case, we pay you a predetermined lease fee monthly or otherwise.
However, no matter what option you prefer, you will be required to meet with all our location, safety and hygiene standards.
What is the average monthly profit for a standard short- let for the owner?
Profit will depend principally on the location of the apartment. But overall, operation of a short- let apartment is far more profitable than giving out your apartment for rental. You can make average monthly returns of up to 49 percent. If it is an owned property, your payback period will be less than six years.
We already have an American short-let model that is now global, are you adopting that model?
Our model works differently from the American model. The American model is a co-habitation model where the guest lives in the same house with the host (the owner of the apartment).
Our model does not encourage co-habitation. Our accommodations are strictly for guests, and we do not expect the house owner to stay in the same apartment with our guests. We need our guests to have their freedom and privacy, which they have paid for.
Do you think that the short-let model will decline patronage of normal hotel offerings?
Not at the moment and I don’t even think it will ever impact negatively on hotel offerings. There are thousands of travellers everyday who need accommodations and each has its own preferences. I know a few people who would always prefer a hotel to a short-let apartment and vice versa. Like I said earlier, it is all about preference, budget and purpose. However, the demand for short-let apartments far outweighs its supply.
Safety and standard are usually issues in short-let, how are you ensuring that?
Yes, we appreciate and know these are the issues in the short-let apartment business and that is the more reason we are building a brand that will ensure safety and standard. Our standards are topnotch and can be compared to any 5-star rating. Recall that in my last response, I mentioned that for us to sign you on, you must meet certain criteria. These include; standards, hygiene and safety. As a matter of fact, we will not put our name or list your property as part of our portfolio if your property is not located in a safe and secure environment.
In all major cities in Nigeria, we have done a mapping of the areas. There are areas we have colour coded Green Zone and others Red Zone. We only accept properties in the Green Zone. Therefore, if you stay in any of our properties, you are sure of safety and quality standards.
How is the willingness of house owners to rent out their apartments for short-let and how is the patronage in Nigeria?
As a company, we work mostly with house owners and the response so far is commendable. There is mostly a lack of knowledge on the profitability of the business, but as we engage with house owners, the response has been quite impressive. However, this model is not completely new with landlords in Victoria Island and Ikoyi.
Where do you see the business in five years?
Our vision is to have 100 apartments yearly and in five years we will have 500 apartments under our brand name. We also expect to be a household name and preferred brand in the short-let apartment segment.
We also expect that investment in the short-let apartment segment will also increase as more people begin to enjoy the profitability in the sector. As usual, we also expect more corporate players to come in.
