Interview
COVID-19 has compounded Nigeria tough business environment – Theodawn Hotels CEO
Mr. Joseph Abohweyere, an Accountant-turn hotelier, is the CEO of Theodawn Hotels and Suites, Ikeja. He told EMEKA EJERE in this interview, that although the impact of COVID-19 pandemic, high cost of electricity, multiple taxation and other factors conspire to threaten his vision of offering porch-living services at affordable rate, he would rather incur loss than compromise customer satisfaction. Excerpt;
Hospitality is among the worst-hit industries as far as Covid-19 is concerned. How has the pandemic affected your business?
The hospitality and tourism industry has been most hit worldwide obviously by the pandemic and eventual lockdown of most facilities. Facilities had to be completely shut down and staff sent home. Our business is completely dependent on cash flow in the economy. With businesses closed and travel on hold, accessibility to guests or guests to facilities became non-existent thereby impacting our ability to remain operational.
Looking at the loss you may have incurred, how do you plan to remain in business now that the restriction on hotels is relaxed?
It is a big challenge for most hotels to come back to business due to the complete loss of revenue for about five months of lockdown. The daily cash flow is the pivot that sustains most hotels and the industry at large. To resuscitate the business, one has to inject some cash to make the facility more safe and compliant with the necessary requirements. Where to get the cash to start up again is the problem as loans are not easy to access in Nigeria.
We have no targeted support system from the government for the hospitality and tourism industry. Bouncing back for most hotels would be a herculean task with the problems of power shortage, excessive and uncontrollable charges from the electricity distribution companies for services not rendered, inability of the Nigerian Electricity Regulatory Commission to do its job, constant dependence on generators, diesel purchase and repairs of the generators. I must say it will take a while for the industry to pick up again.
From your experience so far, how would you describe the Nigeria business environment?
Tough,.very tough. We have issues of multiple taxation. You have issues of unexplained levies by the local government like radio and TV taxes that they cannot explain. And when you ask the officials, they tell you that they really don’t know; it’s just an avenue for the local government to survive – to take extra money from you. No service is rendered. And because they’re part of the government, you cannot fight them. Otherwise they come and cause trouble and embarrassment to the establishment.
So, basically in saner climes, the SMEs (small and medium scale enterprises), are the pivot of the economy and they enjoy some kind of privileges. But in Nigeria, particularly in Lagos, it is not like that. So it is the love for the service, the passion that is keeping us in the business. We keep trying to survive. You don’t have electricity; you’re burning diesel at a very expensive rate; you have to maintain your generator. It’s an uphill task.
And I had people that came back with me (from Switzerland) and they’ve gone back. They could not continue. Several people that came to Nigeria to invest, they lost it all. And instead of continuing, they left. In a nutshell, business in Nigeria, if you’re not that big, is very…very tough.
The issue of exchange rate is something that has put many businesses on a tight corner lately. Is there any way your kind of business has been affected by the exchange rate?
Definitely. For instance, we’re on booking.com, which is an international OTA, that is, online travel agency. So we have people from all over the world trying to book. So when the value of naira falls, their money has more power than ours. But we still have to give the same service at that same rate because that is the rate we have on the website. So like I said earlier, it’s the passion that drives us.
When we travel abroad we know how much we pay for the equivalence of the service we render here. And in those places, they are better supported by their governments. So when they go into hospitality, there is funding unlike here. There’s absolutely nothing that we get here.
Some guests have even asked us at some point, don’t you put your generator off when there is no light?…two separate guests – one from Calabar, the other one is from another side – someone who also owns a hotel. She said by 2: 00 am when the weather is cold, they turn their generator off. But we cannot dare. What we’re offering, like our logo says, is porch living at affordable price. We’re the cheapest in this catchment area.
Around this environs, Theodawn Hotels is the cheapest. And we still try to give that same standard. Some say how come you still give breakfast at the rate you sell your rooms? But the thing is, like I explain to the guests, breakfast is on the go – for you to have something in your tommy when you’re going out in the hotel, it’s supposed to be a cup of coffee, or tea, small toast bread and egg. So they say, how do you do it? They know how much they’ve paid. I said because we want you to be happy. That’s why we call it porch living at affordable rate.
The amount you would have paid abroad, you’ll get it here less than one-third for the same service.
Are there items you use on daily basis that you import?
No, you know the issue of foreign exchange has a multiplier effect. We go to the market; we buy things. Take for example milk. The milk we use, we don’t just use any substandard milk. We use very good quality milk. So the guest that are coming from Europe see the milk that we give them for breakfast, and they know oh, this is good. So the exchange rate affects the producer of the milk, affects the cost of the milk. Whether the milk goes up today or not, we’ll buy that milk. It is the standard. We don’t change unless they’ve stopped producing it, or something better comes up. So it affects us in many ways. We buy diesel, it affects us. Forex affects diesel and so many other things.
Considering the diversity of your target market, do you have, for instance, a multi-linguist in case you have guests from the non-English speaking parts of the world?
We don’t have any multi-linguist here, except somebody that speaks French. It’s only French, no other language. But at least most people, it’s either they can speak French or English, except some Germans.
The diversity also extends to dishes. Do you serve food for people from different parts of the world?
No, just once in a while we tend to – the breakfast is continental. We promote Nigerian dishes. Because when I travel abroad, I eat their food, so when they come to Nigeria, they should try our own food. So, the only thing is that we prepare our cuisines and dishes to suit them. For instance we take spices; a lot of people coming in from other countries can’t really manage spices. So we give them food specially made for them, not like an average Nigerian. There was an American that came and she brought food – instant food- and I said no, there’s food here. She stayed here for three weeks- in the suite, and she was happy throughout. We’re still in touch with her; we still chat with her. And several other people like that. So we tend to be flexible with the cuisine for people coming from outside Nigeria. But basically, they’re Nigerian dishes.
As people in hospitality you’re bound to have all kinds of people, even mad people. I don’t know if you’ve had to manage such people sometimes?
We experience it every time. That’s where the training of the staff generally comes in, because we’re dealing with the public. So we deal with all kinds of temperaments. So the thing is being able to keep your cool, looking calm when a guest is not happy. And then you’ll be able to pacify and attend to the need of the guest as much as possible.
There’re people that’ll come and make request that the staff may not be able to grant. And we politely say no, we cannot do this or this is not allowed. For instance, it’s a non-smoking hotel. But some guests will tell you no, I must smoke. And we’ll say okay, if you will smoke go outside. In most hotels you don’t smoke. However, some bigger facilities will have smoking wings. Like you said, dealing with the public takes a lot of maturity, a lot of tolerance, a lot of calmness and you’re always smiling.
Is there anything government can do that you think can help businesses such as yours by way of policies?
Yes, considerations, like tax consideration. And then electricity is a major issue where you get high rate – they say you’re on manufacturing tariff because we’re a hotel. And we say okay, but we’re not manufacturing anything, we don’t have machines. We’ve been to Ikeja Distribution Company to have discussions with them and they told us there’s nothing they can do about it, that’s the tariff level.
I said but we’re not a manufacturing enterprise. If I’m manufacturing things, and I’m running machines, it’s a different thing; they can put me at that level. But you cannot put me at that level when I don’t have machines running. What we have are air-conditioners and water heaters and the difference is not even much from what you see in many homes, because many people have ACs and water heaters in their homes. We have Nigerian artistes that stay here, and the reason why they come in here is the quietness and the service.
There’s 24 hours electricity. You know if they’re at home and they’re working, if power goes they’ve to go down and look for who’ll come and put on the generator for them. And that distraction is expensive for a creative mind. Maybe it’s at that moment he’s creating something and then PHCN takes light. And once power goes, it breaks that line of thought.
There’re actors when they come here, they won’t come downstairs at all, and then when I see them and ask, eh you’ve been indoors we didn’t see you? And they say I’ve been working. So they need that concentration and the quietness and the service, to deliver what they carry in their minds, you know – to be creative.
Where do you see Theodawn Hotels in the next five years?
We expect to be at the top. We expect to be a household name in the hospitality industry in Nigeria.
