International hotel brands plan acquisition of Nigerian hotels
Global hotels are considering the acquisition of local ones to gain access into the attractive Nigerian hospitality market.
The top Nigerian brands being courted for acquisition or partnership includeChelsea, OrchidRockview.
The move is inspired by the successful experience of Hilton with Transcorp, Sun International with Federal Palace HotelTsogo Sun with Ikoyi Hotel, and recently the Marriot the ProteaGroup partnership.
Rockview Hotel, the biggest indigenous brand with four hotels, Orchid with two hotels, Chelsea with two hotels, Bolingo, Chesney, Soteria, 520 Hotel Group with three hotels, are being targeted by foreign prospectors for space in the Nigerian hospitality market.
Eko Hotel & Suites in Victoria Island Lagos,, NICON Luxury Hotel Abuja, Tinapa Lakeside, are also under consideration
The foreign brands are showing interest due several favourable factors including, high return on investment, as well as avoiding fresh registration and documentation, supervising project building and execution.
According to Mitchell Van Dicker, the chase is for top Nigerian hotels require less work in conversion and upgrade.
ObidikeUfomba, a hotel expert and CEO of a hotel management company, observes that the present crop of indigenous hotel owners want to be in control of affairs, and hence, run the hotels truly as one-man businesses.
“It will be fine to open talks with owners on the possible sale of their substantial shares, but an outright sale of their hotels will be difficult for now. Hotel business in Nigeria is family business, owners often argue that selling shares to foreign brands means brining people that will sooner or later sack their relations. Yet, standard is still an issue, despite the sumptuous profits they make”, Ufomba said.
Jonathan Odega, chairman, Orchid Hotel Group believesNigerian brands have the capacity to thrive in the face of competition rather than wait for international brands to take over.
According to BisiOlabode, a hotel manager, who supports the idea of acquisitions, as long as the business will improve, standards get better, staff are exposed to world-class skills and paid in line with that as well.
“I once went out with my chairman to a 50-room indigenous hotel in Victoria Island and he cherished the hotel because it is only the name that makes it indigenous, every other thing is world-class. If hotel owners are saying no to foreign brand acquisition, then their hotels across the country should be well-built, well-furnished, rightly staffed and maintained to ensure value for money offering”.