Our Market- Hospitality
The market in which we have grown and has great potential for further growth regardless of economic indices and global events like COVID-19. This means that there is demand for hotel bookings as well as hall rentals.
Overview of the Hospitality Market
The demand for hotels in Nigeria, especially Lagos is largely driven by business travel which negates the norm across the continent, where hotel lodgings are largely driven by tourism. Therefore only a small fraction of the industry’s revenue is contributed by tourism. Notwithstanding, Nigeria is endowed with a number of tourist attractions across the country. Major cities like Lagos, Abuja and Port Harcourt account for the bulk of hotel business in Nigeria due to significantly higher levels of commercial activities in comparison to other cities across the country.
- Asset Size: We estimated that the asset size of the Lagos hotel industry stood at ₦1.76 trillion as at December 31, 2019. Given the number of projects by both local and international brands within the state, we estimate that the industry asset size will grow to ₦1.94 trillion by the end of 2021.
- Profitability: The Lagos hotel industry’s revenue at the end of 2019 is estimated at ₦387.4 billion, a 9% increase over the prior year. Overall, the Lagos hotel industry profitability remains good, given a gross profit margin and operating margin of 47% and 27% respectively. With added and specialized services, profitability in the hotel market is expected to be on an upgrade trend.
Our Competitive Advantage
Competition within the industry is high, following the influx of global hotel chains and growth of local brands. Demand remains concentrated in the corporate customer segments with bulk room reservations for business meetings, conferences and event venues. However, the biggest opportunities remain within the economy or mid-scale market due to Nigerian’s large population size and growing middle class. We intend to gain market share by leveraging on pricing, brand differentiation, value added services, collaboration with competitors within and outside our location of operation.
The market drivers in the hospitality industry are as follows:
- Business travel.
- Influx of international brand hotels.
- Increasing activities in the entertainment Industry.
- Social Media Marketing.