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.

Financial Nigeria Magazine - - Contents - 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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