By Okorie Uguru
The Chairman and Chief Executive Officer of Victoria Crown Plaza Hotel, a luxury hotel in VIctoria Island, Mr Emeka Ofor has identified the devaluation of the Naira as a major challenge affecting the growth of the hospitality industry in Nigeria. Ofor was speaking on the challenges facing the hospitality business in Nigeria and how these issues have impacted both local and international patronage.
He said the devaluation has placed a heavy financial burden on both hoteliers and guests, resulting in a complex market dynamic. He lamented that while there is demand for premium services in the local market, many potential customers are unable or unwilling to meet the costs associated with such offerings.
“There are willing buyers in the local market, but they can’t afford the price of maintaining the required standards,” Ofor noted.
Ofor expressed frustration over the disparity in customer behaviour, noting that Nigerians are more inclined to pay higher rates for accommodations abroad than they are domestically. He said, “Nigerians will willingly pay $215 a night in Ghana or other countries, but when they come to Nigeria, they want to negotiate down to $120 and expect world-class services.”
This pricing dilemma is compounded by the expectations of corporate clients, including banks and other major companies, who demand luxury services at reduced rates. Ofor stated that these organizations often propose rates as low as $60 per night, making it nearly impossible for hoteliers to maintain operations.
Adding to the challenges, foreign visitors have also adjusted their payment practices, further straining the industry. “International guests, who used to pay in dollars, now prefer to exchange their currency for naira and settle bills in local currency because they perceive Nigeria as one of the cheapest destinations,” Ofor explained.
The devaluation is not the only hurdle facing hoteliers. Ofor highlighted Nigeria’s perennial power issues as a major operational bottleneck. “The cost of power is astronomical,” he said, citing the high cost of diesel and electricity tariffs in Band A, which have increased the cost of production significantly.
Ofor also pointed out the challenges associated with securing financing for infrastructure improvements. He explained that the hospitality sector has been particularly hard-hit by high-interest rates, with banks offering loans at a staggering 36 per cent. “These are trading interest rates, not meant for long-term investments in infrastructure,” he said.
Despite these challenges, Ofor remains optimistic about the future of the industry. He called for structural changes that could alleviate the burden on hoteliers and promote local economic growth. “I hope the Nigerian naira gains strength or that we start finding ways to limit imports and encourage local production. This would compel Nigerians to buy made-in-Nigeria products, ultimately strengthening the naira,” he stated.
Ofor emphasised that promoting local manufacturing could have a ripple effect on the economy, creating a more stable environment for businesses like his to thrive. He expressed hope that with proper policy interventions and monetary reforms, the hospitality industry could experience a revival in the coming years.