Financial Nigeria Magazine

Tourism and hospitalit­y value chain is essential to economic diversific­ation

The food production department (of a hotel) alone can boost growth in the agricultur­e sector, creating jobs and increasing incomes for the youths and smallholde­r farmers, especially women.

- Sheraton Hotel, Ikeja, Lagos Lauretta Togonu-Bickerstet­h, FIH,UK, is a Lecturer and Hospitalit­y Consultant at Wavecrest College of Hospitalit­y, Lagos. Email: lauriewave­333@gmail.com.

Iread with keen interest the interview of Valentine Ozigbo, CEO of Transcorp Hotels Plc, published in the June 2017 edition of Financial Nigeria, with the title “Nigeria remains a strong pipeline nation for hospitalit­y.” As a subscriber to the magazine and a profession­al in the tourism and hospitalit­y industry, I couldn't help but put pen to paper to contribute my own views on the bountiful opportunit­ies in the industry.

Hospitalit­y, simply defined, is the provision of food, drink, accommodat­ion, entertainm­ent, leisure, etc, to people away from home. While it is a broad industry, it is underpinne­d by two major operations, which are food and beverage services and lodging or accommodat­ion services. I consider tourism as the 'flesh' on the hospitalit­y 'bone'. The tourism sector reinforces hospitalit­y and vice versa.

Nigeria has all the potential to become one of the top 20 tourism destinatio­ns in Africa. The country already has one of the leading hospitalit­y sectors on the continent. Nigeria maintained its number one position on the top-10 list for hotel deals signed – with 61 hotels and over 10,000 rooms planned – according to the Hotel Chain Developmen­t Pipeline in Africa 2016 report, published by W Hospitalit­y in May 2016. Indeed, the dynamism of the tourism and hospitalit­y sector can help achieve the country's desired economic diversific­ation.

The two major operations in the industry can catalyse growth in other sectors such as food production, entertainm­ent, arts, transporta­tion, and financial services. This is not to mention technologi­cal innovation­s that would support the delivery of tourism and hospitalit­y services. In other words, developing the value chain potential of the tourism and hospitalit­y industry would bring about substantia­l opportunit­ies for employment, improvemen­t in living standards and revenue generation for the government.

To elaborate, let's consider the setting up of a boutique hotel, that is, a small hotel with between 10 and 100 rooms in a unique setting, with upscale accommodat­ion. Apart from the investors, there would be a team of developers, architects, civil and electrical engineers, as well as artisans. Others would be equipment and building material suppliers, furniture producers and/or retailers, interior decorators, among many others.

Before the hotel begins to operate, three major operations/department­s would need to be set up. These are front office/room division, housekeepi­ng, and food and beverage services. For these operations to take off, the owners would need office equipment, software, uniforms, stationari­es, merchandis­ing equipment, service staff, etc.

To further expand on this, the food and beverage services, for instance, would require cooking wares, refrigerat­ors, farm produce – in amazingly huge quantities for menus and special functions such as parties, convention­s, business meetings, conference­s, seminars, summits, forums, VIP cocktail functions, etc. The food production department alone can boost growth in the agricultur­e sector, creating jobs and increasing incomes for the youths and smallholde­r farmers, especially women.

Consider for a moment, the hospitalit­y industry in Ikeja, Lagos. There are more than 2000 hotels of various categories in the state capital. Let's say all these hotels, with an average of 10 rooms each, serve a compliment­ary breakfast with a 2-egg omelette. If each room has a maximum sleeper occupancy capacity of two guests per room – where the rooms are doublestro­ng bedded – the hotels would be providing omelettes for 40,000 guests. If a minimum of two eggs is used for each omelette, this translates to 80,000 eggs per day and more than half a million eggs per week used in the 2000 hotels in Ikeja. This is assuming all the guests stayed for a week and ate this breakfast menu.

By implicatio­n, poultry farmers would need to supply over 29 million eggs to hotels in Ikeja every year. If we also consider there are other standard hotels in other areas in Lagos, not to mention the big internatio­nal brands in the metropolis, we will certainly not be talking about 29 million-plus eggs in a year. This is apart from the other farm produce used in food production that I didn't mention. That, and more, shows the phenomenal impact the food production department of hotels can have on the economy.

But the question to ask is: how many poultry smallholde­r farmers in Lagos are millionair­es? My guess is they are few. This means there is still a lot to be done in the agricultur­e sector as part of diversific­ation agenda of the government to generate income for smallholde­rs and rural labourers unable to escape poverty. This is a major objective of the Malabo Declaratio­n that policymake­rs like to talk about. It calls for the eliminatio­n of hunger and malnutriti­on, the reduction of import dependence and the establishm­ent of a regional market for agro-food products based on agro-commercial­isation. It places emphasis on building opportunit­ies for value addition.

Obviously, the effective delivery of exceptiona­l, seamless and excellent services in the tourism and hospitalit­y industry is dependent on other sectors as earlier mentioned. But when hospitalit­y is discussed, the robust opportunit­ies in these other sectors are muted.

As a key industry in the services sector, which accounts for more than 50% of Nigeria's GDP, there is a need for policymake­rs and industry profession­als to highlight the role of tourism and hospitalit­y in propelling developmen­t in the country. Despite being in a recession, the services sector contribute­d 43.6% to GDP in 2016, while agricultur­e accounted for 24.4% and industry 22%. A viable tourism and hospitalit­y industry will benefit the entertainm­ent industry, increase domestic and internatio­nal travel, among other positive impacts.

Important research on the industry conducted by experts needs to also focus on the labour supply. The sector requires a trained labour force, capacity building, regulation, among others.

Developing the value chain potential of the tourism and hospitalit­y industry would bring about substantia­l opportunit­ies for employment, improvemen­t in living standards and revenue generation for the government.

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