THE RESILIENCE AND RECOVERY OF THE LAGOS AND ABUJA HOTEL MARKETS
There’s a good news story to tell about the hotel markets in Lagos and Abuja, respectively the commercial and national capital of Nigeria.
The decreasing room occupancies in Lagos in 2014 through 2016 were due to the West Africa Ebola epidemic, security issues, political uncertainty in 2015, decreased spending by government and by the oil & gas industry as the price of oil dropped, and the economic crisis in 2016 which continued into early 2017.
In 2018 and 2019 there was a marked recovery, despite slow growth in the national economy (proof of the fact that Lagos fares better than the nation as a whole), with significant improvements in occupancy and ADR.
In 2020, in common with the global industry, Lagos’ hotels were hit very severely by the COVID-19 pandemic. In January and February 2020 the market was very strong, significantly above 2019, and at that time there were expectations of a continued increase throughout the year – it was in March that the impact of the pandemic began to be felt, resulting in the worst year on record. At 42.4 per cent occupancies were far better than in many other cities, including Abuja, because some of the hotels accommodated quarantining and travellers as well as companies isolating their employees there to “shelter in place” and continue working.
In 2021 there was an incredible recovery from a disastrous 2020.
Whilst the beginning of 2021 was a bit slow, with many travel restrictions and requirements still in place, and airlift was down, both domestic and international, from June 2021 onwards, demand grew, primarily from the domestic market.
Abuja saw a similar trend to Lagos, and a decline in 2014. Unfortunately
there are no authoritative data available for 2015-2017, but there was a similar decline as was experienced in Lagos, with the beginnings of recovery in 2017. 2019 occupancies were just above 2013 levels, but 2020 was even worse than Lagos. The bounce-back in 2021, fuelled almost entirely by domestic travellers, was quite extraordinary!
The previous analysis is just for occupancy, with Lagos about 8 percentage points below 2019, and Abuja level pegging. When one considers RevPAR, which provides a measure of actual revenue rather than just “heads in beds” (see "What is RevPAR?: by Dr Belinda Nwosu), this is the result: travel and tourism industry, it is clear that, at least in Africa, those cities dependent more on international demand are those that are the most far behind.
Outside of Africa, only Dubai is anywhere close to recovery to 2019 levels, with RevPAR 3 per cent down at the end of 2021, whilst New York and Paris are both 43 per cent down, London is 54 per cent down, and Tokyo is fully 71 per cent behind.