Lagos leads other African cities in hotel occupancy rates in 2017

A South African-based hospitality and tourism industry researcher, HTI Consulting has revealed that hotels occupancy rates in Lagos, Nigeria, came off a low base in light of more positive economic projections in 2017, as the countrys economy recovered from its worst recession in 25 years.

In terms of occupancy growth, Lagos alongside Accra led the assessed figures in 14 African cities for 2017, as indicated by the premium global data benchmarking, analytics and marketplace insights, STR Global.

The strong growth in Accra (Ghana) propelled occupancy rates to a healthy level just above 60 percent.

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The cities are Nairobi, Addis Ababa, Cape Town, Dakar, Dar es Salaam, Lusaka, Monrovia, Gaborone and Windhoek.

“Nairobi’s (Kenya) occupancy performance was the weakest of the cities assessed, with a decline in occupancy of 11.1 percent followed by Dar es Salaam (Tanzania) with a decline of 9 percent driven largely by investor uncertainty in new government policy, limiting business travel to the city,” contained in the report by HTI.

According to the report, Lagos' occupancy performance in local currency terms on Average Daily Rates (ADR) increased by 5.4 percent while in Dollar terms showed the biggest decline in ADR of 19 percent as a result of the Naira depreciation against Dollar which was about 16.5 percent in July/August 2017.

“The number of room nights sold in Nigeria’s commercial city, Lagos, increased by 17.6 percent as a result of the economic recovery in Nigeria. This significant increase offset 2.5 percent growth in supply. A similar situation was experienced in Accra, which saw a rise in room nights sold to 13.7 percent as the economy emerged from a recent slump,” HTI notes.

In 2016, a survey conducted by Thisday, a local newspaper showed that the occupancy rates in Lagos hotels fell below 35 percent due to economic shortcomings.

Findings by the newspaper revealed that the hardest hit were the four and five-star hotels in Lagos and Abuja, where bookings dropped significantly during the period.

This development is coming just as the Lagos State Government recently launched the Hotel Occupancy and Restaurant Consumption Tax Law to enhance collection and ensure tax compliance from owners of hotels, restaurants, nightclubs, drinking pubs, event centres and hospitality venues within the state.

Lagos state governor, Akinwunmi Ambode said automation of the system was introduced to address the high level of underpayment and non-remittance of what is due to government, however assuring that it would be a win-win situation for all parties.