Jumia Travel Reports show that the Nigerian Hospitality Industry contributed about 4.8% of the country’s GDP, and that by the end of 2020 the industry will be worth about $1.118 trillion.
Every street corner you find hotels, Air B&B, Guest Houses, and Residential apartments turning into hotels. Yet, as they are opening at such a fast rate, they close down even faster.
Curzon and Jones Hospitality Consultant presents to you the top reasons why Hotels Fail in Nigeria.
"I am the Ex CEO of a bank, I have run 5 companies, I am a financial wiz-kid so what is so complicated in running a hotel?" Hmm... stop right there 😒.
Running a hotel in Nigeria is not the same as running a hotel in Europe; owner interference is the main reason why hotels in Nigeria fail. Hotel owners believe they know it all and know more than the hospitality expert. Hence, they open a hotel and after 6 months, they get to realize that it is not business as usual.
Thinking of opening a hotel? DO THIS FIRST:
Hire Jones Hospitality to do a detailed feasibility study.
No Online Presence
80% of hotels in Nigeria lack online presence and do not have a website. No website means a loss in up to 50% of your revenue. For as little as ₦70,000 you can have a website, an official email address and a Pay Direct button embed into your site, all handled by Horeca Cloud
No Investment in Training
Its Monday, 9.00 am and your Waiter just quit. Then, by 3.00 pm you've already hired his replacement 😐. Neither a prior background nor reference check was carried out. The new Waiter has no knowledge of the hotel facility, yet, you keep complaining that the service is bad and business is slow.
HOW DO YOU FIX THIS?
- Outsource your HR needs to Anywork Naija, Nigeria's top Hospitality & Recruitment Agency
- Ensure onboarding is done for New Hire
- Develop a train-the-trainer programme for each department.
Increase in Taxes (VAT is Now 7.5 %)
Let's face it, the new VAT & CBN stamp put a damper on Hotel revenue. It means more remittance and more Tax. Hello Mr Hotel Owner, this does not solely affect you. Hotels that pay their staff service charge have seen over 70% increase in guest and employee satisfaction. Service charge is 10% in Nigeria and is also known as the staff tips paid in bulk.
HOW DO YOU FIX THIS?
- Create a service charge culture in your hotel
- Agree to a service charge sharing rota with finance
- Have a monthly staff meeting and pay service charge promptly at the 15th of every month
First, let's create 3 relatable scenes
• "Hello Madam this is Bello the Security guard, please Ma I find 100 USD in the waiter pocket when I searched him"
• "Oga 1 bottle of Hennessey Is missing from the store I am suspecting Sule because he worked at night 🤔"
• "Kola how come the goat meat I bought yesterday has finished and yet you said no sales? 🤥"
It's safe to say a large number of those in the hospitality business have probably witnessed those instances above. Theft in the hotel industry in Nigeria is quite high. You hire today, you fire tomorrow, is there no end 🤦? Well, here is the good news, it does end 😃.
Thanks to HORECA cloud, hotel owners can now spot theft a mile away and stop it. HORECA cloud is an online cloud-based property management software designed for Nigerian hotels. It has all you need and it being cloud-based means you can know what is happening in your hotel anywhere and anytime.
"My Brother is the GM and My Wife is the Procurement Officer & MD"
Before you hire your family member as the Manager of your hotel ensure that they have gotten the proper training and are equipped to run a hotel. Jones Hospitality offers short-term training for clients who wish to manage and run small hotels.
Most guests read online reviews of hotels before making a choice. Not paying attention to feedback from guests will negatively affect the online reservation stream. When negative reviews outweigh positive reviews without follow up responses by the hotel, online potential bookers become apprehensive and look for alternatives within the same star grade and pricing. Most hotels offer feedback forms either at check out or in the room.
HOW DO YOU FIX THIS?
Have a guest feedback form in your room
Send guest welcome and departure email with Horeca Cloud
Have one on one conversations with the guest to get tangible feedback
Many Hotels struggle with success due to the implementation of poor marketing. A hotel needs proper marketing tactics to stay competitive and relevant in the industry 🤷. The reach of marketing cannot be underestimated.
HOW DO YOU FIX THIS?
Hire Curzon Communications to boost your hotel’s visibility. It is the best go-to for the right marketing strategy for your hotel and hospitality business at large.
Most hotels/restaurants do not put into recognizance that the hospitality has its low and peak seasons. When the peak and low periods are established, it is always brilliant to plan ahead in order to sustain the business 😉.
Poorly Serviced Room
Let's create another instance here:
Guest to Receptionist: "Can I see your Manager? I want a refund, the roof is leaking, the bedsheet is dirty, there is no hot water in my room" 😫
Receptionist to the Guest: "Hmm oga abeg no refund o, My MD has traveled but please Sir can I give you a bucket and boil hot water for you? We also have Fan as the AC is not working."
The above dialogue is the norm in boutique hotels in Nigeria. Poorly cleaned and maintained rooms will cause dissatisfaction and affect repeat guests. When guests do not get value for their money, they make alternative plans. Air conditioning, hot water, water pressure, bad mattress, linens and towers, ambiance, poor TV signal are some of the major complaints about rooms. It is more frustrating for guests where they are moved to another room and they experience the same or even worse challenges than the previous room.
One more scene, shall we 😆? :
"Oh God what kind of Job is this? It is the 15th of the month and I have not been paid, No staff meal, late payment of salary, no medicals! 😭"
This is the cry of 70% of waiters in Nigeria; you owe and you owe them and yet you wonder why they steal? Dear Hotel owner, the issue here is that business is down because you are not doing well 🤷. But guess what? if you did the right thing from the beginning business will be up. DO NOT PUNISH YOUR STAFF
Would you like to know more about your hotel business?
Do you wish to realize how to achieve a successful running of your hotel?
Chat with a representative of Curzon & Jones today 🙂