Recession: Nigerian big hotels groan as occupancy drops below 35%
– Nigeria’s hospitality sector has been hit hard by the economic recession currently ravaging the nation
– Occupancy rates in choice has fallen below 35 per cent
– Former patrons now prefer to book rooms at cheaper hotels
A report by Thisday indicates that bookings for rooms in four and five-star hotels in Lagos and Abuja have dropped significantly as individuals and companies now prefer to book rooms at cheaper boutique hotels due to the economic recession.
Transcorp Hilton Hotel, Abuja is one of the hotels affected
Nigeria’s biggest hotels can be found in the country’s capital, Abuja and commercial nerve centre, Lagos.
According to the report, occupancy rates in hotels such as Southern Sun, Intercontinental, Wheatbaker, Eko Hotel and Suites and Federal Palace, all in Lagos has dropped significantly.
In Abuja, the story is the same for hotels such as Transcorp Hilton and other choice hotels around Nigeria’s capital. ,
The largest property in the federal capital city, which over a year ago boasted an occupancy rate of 70-80 per cent, has seen a slight drop to 65 per cent.
A company source quoted in the report admitted that weekend occupancy rate at the Transcorp Hilton has dropped significantly, but is offset by improved room bookings on week days.
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The hotels have also laid off some workers in order for them to meet up with the demands of the business.
“The point is that a lot of the big hotels have continued to lay off their workers. Like the Southern Sun and Intercontinental Hotel, they had to lay off some workers because of the recession. Today, more people prefer to go to cheaper boutique hotels, not exceeding N50,000 a night.
“They now go to hotels which are rated two to three stars such as the Protea chain in Lagos and Abuja. With less money, people would be booking them more,” an operator who pleaded to remain anonymous said.
Speaking on the development, renowned economist, Mr Bismarck Rewane, said the average drop in the occupancy rate across the large hotel chains could even be far below 35 per cent.
His words: “If you discount the flight crew rate, it’s even lower. That is because flight crews are always offered cheaper rates. For instance, when a British Airways is booking hotels, if a room is $200, they would pay maybe $100 or even $65 because they are paying for the whole year.
“So, the cabin crew rate is always cheaper. If you discount the cabin crew rate, if occupancy rate is about 40 per cent, they are down actually by 28 per cent.
“The economic recession has finished them (hotel operators) completely. With three consecutive quarters of increasing negative growth, that means some things are not working right.”
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The Nigerian economy shrank to 2.2% for the third quarter of the year according to a report published by the National Bureau of Statistics on its website on Monday, November 21.
The Nigerian economy has witnessed a decline in every quarter so far this year with an inflation rate that’s at the highest in more than a decade.
Meanwhile, unemployment is on the rise in Nigeria as downsizing is the order of the day in the productive and services’ sectors.
Latest indicators show that more Nigerians now seek jobs that hitherto never appealed to them just to meet their daily needs.
In a related development, telecommunications services provider, Ericsson has served its Nigerian workers sack notice which will take effect by the end of this November.
According to Nigeria Communications Week, the affected workers are working in the Network Operating Centre (NOC) of the company.
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