Nigeria’s hospitality industry suffers huge loses

…hotel rooms, event halls empty as virus keeps travellers, revellers, away

By AYOOLA OLAOLUWA

Nigeria’s tourism and hospitality industry have taken a massive hit from Coronavirus pandemic with players recording huge losses amid growing fears of a looming economic crisis.

According to Business Hallmark findings, aside the country losing the much needed foreign exchange to the abrupt slump in the volume of visiting travellers and tourists, many businesses that depend on the hospitality industry, including hotels, restaurants, airlines, travel agencies, tour guides and car hire agencies, among others are currently reeling from the effects of the pandemic.

The National Bureau of Statistics (NBS) had in its most current report on the tourism industry issued in 2018 said that the sector contributed 34% to Nigeria’s GDP and generated 20% employment. According to the bureau, tourism sector accounted for 34 per cent of GDP and about 20 per cent of the nation’s employment creation in 2017.

Statistician-General of the Federation and Chief Executive Officer, NBS, Dr Yemi Kale, who said that tourism activities in Nigeria had immense potentials, also rated the sector as a $500 billion economy. He had said that Nigeria was an inspirational destination for visitors, adding that international visitors come to the country to immerse themselves in its landscapes, indigenous culture and experiences and do business.

Checks revealed that apart from airlines, hotels are the most affected by the scourge. Our correspondent, who visited many top hotels and lodgings in Lagos, discovered that most of them were empty of lodgers as many travellers had cancelled bookings, partly due to restriction of movements into the country and the cancellations of flights by international airlines.

Activities were at the lowest during a visit to the Lagos Sheraton Hotel, 30, Mobolaji Bank Anthony Way, Maryland, last Thursday, as workers were seen idling away with not much to do. Some of the facilities in the hotel like the Crockpot Restaurant, which serves African meals, the fitness centre, poolside bar, as well as the outdoor swimming pool, were devoid of the usual bustling.

The hotel management in a travel advisory on its website to its customers, said, “Please be aware of any Coronavirus (COVID-19) travel advisories and review updates from the World Health Organization (WHO). Due to the unprecedented volume of travel disruptions, refunds may take up to 30 days to process.

A senior manager of the hotel, who spoke with BH on the condition of anonymity, said that the hotel is badly hit by the effect of the Coronavirus. According to him, most of the hotel’s 337 rooms and suites are currently empty as those who booked accommodation and other services have cancelled deals and demanding a refund.

“Normally, two out of the eight-floor facility is reserved for airlines and their crew. They include British Airways, South African Airways and Emirates. They alone accounted for about 40% of our clientele and income. Apart from accommodation, they accessed other services like feeding, which brought the hotel a lot of income.

“After they cancelled their operations due to restrictions by the authorities of several countries, we lost their accounts, at least for now”.

He revealed that the situation worsened last week when several foreign tourists and business travellers postponed or outrightly cancelled their travel to Nigeria due to the surge in the numbers of infected people.

He further warned that the decision of some foreign governments to evacuate their citizens from the country would further exacerbate the already delicate situation.

“Already, the hotel is currently struggling to cope with the slump in demand. Jobs lost are imminent if the situation does not improve soon”, he said.

It would be recalled that some European countries, particularly Britain, had last week disclosed that they were exploring flight options to evacuate their nationals wishing to leave Nigeria.

The British High Commissioner to Nigeria, Ms Catriona Laing, said the decision was informed by “the rapidly changing situation in the region and recent airport closures” over the Coronavirus pandemic.

The envoy, who said this in a statement on the UK High Commission’s Twitter handle, @UK in Nigeria, at the weekend, noted that the commission had decided to reduce the number of the High Commission staff and dependents.

Laing explained that the missions in Abuja and Lagos will remain open to carry out essential work, including providing 24 hours consular assistance and support to the British nationals in the country.

“Given the rapidly changing situation in the region, the recent airport closures and recognising that it has become more difficult to get out in case of need, we have decided to reduce the number of UK (United Kingdom) staff and dependents from our High Commission.

“Our missions in both Abuja and Lagos will remain open, continuing to carry out essential work, including providing 24/7 consular assistance and support to the British nationals in Nigeria.

“We are exploring a range of options for sending staff and dependents home as there are no commercial options available,” the statement read.

The situation is the same in other hotels visited by our correspondent last week. The case of Eko Hotels on Victoria Island is more pathetic as the once bubbling hotel was a shadow of itself. An observant onlooker will observe the anomaly right from its entrance, as the small queues which normally build at the entrance gate were absent during a visit to the edifice last Thursday.

The hotel’s car parks were also largely empty due to the absence of patrons running away from the Coronavirus plague.

The situation was not different inside, as many of the hotel’s facilities were idle and unoccupied, unlike in the past. Mostly affected by the plague are the Eko Convention Center, the largest multipurpose conference, banquet and exhibition hall in Nigeria and the Brand Ballroom, which sits 350 guests for dinner. Before the outbreak, the halls start to host big events from Wednesday, through Sunday.

However, many would-be customers have fled for their lives to avoid contracting the Coronavirus. A ground floor office in the hotel told BH that business started going bad for the hotel towards the end of February, but worsened after the Lagos State government announced that one of the guests that attended the African Magic Viewers’ Choice Award (AMVCA) held at the hotel had tested positive to Coronavirus.

The announcement, he claimed, scared other event organizers who quickly called off already scheduled events, claiming that their guest had indicated that they would no longer be attending.

BH recalled that the motion picture industry and Multichoice, organisers of the recently held AMVCA, were last Tuesday, thrown into a panic when the Lagos State Commissioner for Health, Prof. Akin Abayomi, announced that a suspected COVID-19 infected person did attend the event and might have mingled with guests at the star-studded show which held at the Eko Hotel on Saturday, March 14.

The commissioner also urged attendees to observe strict self-isolation for two weeks and contact health workers should they notice any corona virus-related symptoms. The 7th edition of the awards, which held at a time when the Coronavirus pandemic began spreading in Nigeria, recorded a large turnout of Nollywood stars, celebrities in the entertainment industry, corporate sector players and journalists. More than 3,000 people are said to have attended both the ceremony and the after-party.

The federal and Lagos State governments, it was also gathered, had prevailed on the hotel and others to cancel all scheduled events. Hit by the cancellations of bookings and loss of revenue, the management of the hotel said it was partially shut it down in the interest of the public.

“It is with great difficulty, but with the safety of You and our community in mind, that we have decided to temporarily close our Eko Suites Hotel, Eko Gardens Hotel, 88 Restaurant, Lagos Irish Pub, Sky Restaurant, My Thai Restaurant, Red Chinese Restaurant, Crossroads, the Spa, Gym, Pool, and Conference and Banquet facilities.

“However, part of Eko Signature and Eko Hotel, as well as Kuramo Sports Cafe, Calabash Bar, Lagoon Breeze, 1415 Seafood and Steakhouse are still operational.

“We urge you to take the necessary precautionary steps advised by the Nigerian Centre for Disease Control (NCDC) in staying safe, as we fight COVID-19 together,” the management said in the statement to its customers.

Many industry experts, who spoke to BH at the weekend, lamented the continued decimation of the industry, warning that it may not recover from the shock of the lockdown from coronavirus pandemic.

The Managing Director of Tours and Travels, a travel agency based in Ikeja, Mr Michael Darling, described the current state of the situation in the hospitality industry as unfortunate.

“Our phones have stopped ringing. Customers who booked for flights and hotel accommodation have almost cancelled.

“At least, 230 of our customers who are Americans, Russians, Spaniards, Italians and Britons are trapped in their home countries due to the strict movement regulations put in place by their home governments. They have all cancelled their reservations and demanded a refund.

“Our car hire service arm is also affected as our drivers and tours guides are idle with nothing to do. We have placed them on half salaries. If things did not improve, there will be no other option to ask them to go.

“Many people who are cancelling their bookings are requesting for a total refund. The terms and conditions in the booking agreement do not capture cancellation. This is affecting us as booking money is always used before tourists come. We didn’t have a contingency fund to respond to cancellations,” Darling lamented.

Darling also revealed that about eight in every 10 hotel rooms in the country have become vacant due to flight restrictions and border controls instituted by the government.

Likewise, the pandemic has taken a huge toll on Nigeria’s aviation industry. According to the International Air Transport Association (IATA), Nigeria’s aviation industry will lose over 2.2 million passengers due to the disruption of air travel amidst the fight against Coronavirus.

The association also stated that the country’s aviation industry will lose over N160.58bn (using Bureau de Change rate of N370 to $1) ($434m) in revenue and 22,200 jobs.

The association, an umbrella body for 290 airlines globally, had in early March projected 853,000 losses in passenger volumes and $170m loss in base revenues in Nigeria if the spread of COVID-19 continued.

However, in its country-specific loss analysis, IATA said since the end of January, thousands of passenger flights had been cancelled in Africa. It added that the cancellations would increase exponentially with the implementation of additional measures in different countries.

Findings revealed that virtually all local airlines have suspended operations. Affected are Aero Contractors, Arik Air, Air Peace, and many others.

“It is with a great sense of responsibility that we have decided, in the best interest of our nation, passengers and workforce to suspend scheduled flight operations for 23 days effective 23:00hrs on Friday (an hour before midnight) the 27th day of March 2020, as a result of the COVID-19 pandemic,”  said Air Peace’s management in a statement.