Travel/Tourism
Nigeria Contributes 49.6% to West African Hotel Pipeline
By Modupe Gbadeyanka
West Africa has been at the heart of the continent’s growth and economic transformation in recent years. Notwithstanding the sharp slowdown experienced in 2016 and 2017, the region’s economy is expected to rebound in 2017 onwards.
Commodity-based economies, like Nigeria, are slowly recovering from the fall in oil prices and oil production, while countries like Côte d’Ivoire, Mali, and Senegal have shown economic resilience and sustained growth.
As many of the countries continue to stabilize – politically and economically – the region will be better integrated from a local and international context. This increased integration raises the need for quality travel and accommodation infrastructure.
The growth of the hotel sector is an important indicator of how well a market is developing its travel infrastructure, and the indicators for West Africa are mixed.
According to W Hospitality Group’s 2017 Hotel Chains Pipeline report, West Africa has a pipeline of 114 hotels and 20,790 rooms, accounting for 42 percent of the Sub-Saharan African hotel pipeline.
However, of these hotel deals signed and planned, only approximately 9,875 rooms, or 48 percent have moved to construction.
In addition, projects in the region have longer than average development periods at approximately six years, compared to the two- to three-year development program that is usually planned.
Some of the reasons for these delays are high capital investment required, lack of access to adequate financing options, limited access to raw materials, high construction and material costs, a heavy reliance on importation, inadequate technical capacity to manage the development program, and other barriers to entry.
Of the hotel pipeline for West Africa, Nigeria contributes 49.6 percent or more than 10,000 hotel rooms (in 61 hotels). Nigeria is also the top market in Africa for planned rooms.
The other substantial markets in West Africa include Cape Verde with 11 hotels and 3,478 rooms, and Senegal with 14 hotels and 2,164 rooms. These three markets contribute a total of 15,955 hotel rooms, or 77 percent of the West African hotel pipeline.
Approximately 57 percent of the pipeline in these countries have moved to site, however some of these projects have been stalled for some time. In a country, like Nigeria, this can be significant.
For instance, 40 percent of Nigeria’s pipeline was signed between 2009 and 2014, and as the chart above illustrates, a large portion of these projects is still in the “planning” phase. In Senegal only approximately 44 percent of the deals signed have moved to site.
Although the pipeline of hotels to the sub-region is encouraging and indicative of strong investor interest, the low completion rate of projects could be troubling for the development of the hotel sector.
It is also difficult for the hotel chains whose expansion plans in these markets rely on partnerships with local and foreign investors to develop these hotels. All the major global hotel chains have strong expansion plans to increase their operating presence on the continent, and in West Africa.
The growth strategy for these hotel chains have traditionally relied on their development teams signing deals for new build hotels, primarily with their flagship brands, with local owners.
However, more chains are adopting creative expansion strategies, such as conversions and rebranding of existing properties, acquisition of existing local hotel operators, effecting growth through the franchise model, or developing owned hotels first.
Senior representatives from major hotel groups such as Hilton, Carlson Rezidor and Mangalis, and other key hotel experts will be discussing growth strategies in the ever-changing West African economic environment at the upcoming West Africa Property Investment (WAPI) Summit to held on November 28 & 29 at the Eko Hotel & Suites, Lagos Nigeria.
Hilton recently announced a plan to support the conversion and rebranding of 100 existing hotels through its Hilton Africa Growth Initiative, by committing $50 million to supporting these conversions.
Commenting ahead of the conference, Mike Collini, Vice President Development Sub-Saharan Africa, Hilton, remarked on the opportunities presented by the inadequate hotel supply.
He said, “To overcome this we are looking at rolling our focused service brands in key markets with a focus on our Hilton Garden Inn product. We are also pioneering the use of modular construction with a new Hilton Garden Inn in Accra, which is a fast and cost-effective build model for owners and developers.”
Andrew McLachlan, Carlson Rezidor’s Senior Vice President Africa & Indian Ocean for Development, said in a direct comment to Estate Intel, “Today we have 17 hotels open or under development in the region and in our new 5-year development strategy we have identified five Tier 1 Cities in West Africa (Lagos, Abuja, Accra, Abidjan and Dakar) where we see scaled growth opportunities…across the luxury to midscale hotel segment.”
McLachlan also commented on the model of conversion of existing hotels, saying that the group sees an opportunity to adopt this model to reposition the hotel under its management, particularly in cases where the existing hotel may not be performing to its full potential.
Newcomer and regional hotel chain, Mangalis Hospitality Group, intends to increase its presence in West Africa, in the next five years. Wessam Oshaka, in a statement to Estate Intel reiterated the group’s “ambition to operate at least 13 hotels by 2020 in West Africa.” The group had initially focused development on owned hotels in core markets such as Cote d’Ivoire and Senegal, but the second phase of development will now focus on management agreements, resulting in a portfolio that will comprise 75 percent owned hotels and 25 percent managed hotels.
Oshaka explains that, “Africa as we know, suffers from a lack of properties responding to the needs of modern travellers.
“The region comes with its challenges especially in terms of financing, logistics and skilled workforce. Taking all these factors into account, we adopted the most suitable approach for a healthy growth plan.”
The hotel sector discussions at WAPI will expand on these topics, highlighting the success cases and the more challenging markets. The discussions will also centre on key indicators of hotel performance in West African markets.
By Adedapo Adesanya
The International Finance Corporation (IFC) has announced a $13 million investment in the Africa Conservation and Communities Tourism Fund (ACCT Fund) to support the post-pandemic recovery and sustainable growth of sub-Saharan Africa’s ecotourism sector.
The investment will support ecotourism businesses in and around conservation areas in East and Southern Africa, with a focus on South Africa, Botswana, Kenya, Namibia, Tanzania, and Zambia.
The ACCT Fund will invest in operators of safari camps, hotels, and lodges, helping them address liquidity shortages while recovering from the impact of the COVID-19 pandemic.
The fund will also help them refurbish, renovate, and expand their operations, especially where the businesses can achieve meaningful conservation and community development impact.
Impact investment and advisory group, ThirdWay Partners, and The Nature Conservancy, a global environmental non-profit organization, established the ACCT Fund, a structured debt vehicle, in 2021 in response to COVID-19-related challenges affecting the ecotourism sector.
Based on IFC estimates, the ACCT Fund is expected to contribute at least $530 million to economies where it invests through direct, indirect, and induced effects in the agriculture, retail, transportation, and recreational sectors. IFC expects the investment to also save about 21,200 full-time jobs.
“We are very grateful for IFC’s support of this innovative and very important initiative,” said Mr Maarten Weehuizen, Managing Director of the ACCT Fund. “The ACCT Fund is an impact investment vehicle which balances financial goals with a clear conservation and community impact agenda.”
“Tourism is critical to the long-term survival of conservation landscapes across the African continent, to the benefit of the people and the wildlife who depend on them,” Mr Weehuizen added. “Even prior to the COVID pandemic, these areas were under significant pressure; tourism provides jobs in rural areas, funding for nature protection and its activities with guests in these landscapes significantly reduce the risk of poaching, deforestation, and land conversion.”
Ecotourism businesses are committed to protecting the environment and wildlife where they operate.
“As part of this innovative blended finance approach, IFC has partnered with the Nature Conservancy, a global environmental conservation organisation, to support sustainable ecotourism and deliver impact to small tourism operators,” said Mr Sérgio Pimenta, IFC Vice President for Africa. “IFC’s investment in the ACCT Fund will help financially affected ecotourism businesses to preserve jobs and contribute to the local economy. The partnership aligns with IFC’s strategy to support the revival of domestic and regional tourism markets and to use a blend of financing tools to support countries’ development priorities.”
With the financing from IFC and other investors, the fund has now reached a final close with a total of $70 million raised. The ACCT Fund is structured using a blended finance approach with three tranches of capital: grant funding, junior equity, and senior equity funding.
In addition to financing, IFC will also provide non-commercial risk mitigation and capacity building by supporting the development of climate guidelines that will contribute to setting standards for the sector and help operators improve their environmental performance by reducing energy and water use and improving waste management.
By Modupe Gbadeyanka
The Economic and Financial Crimes Commission (EFCC) has been urged to probe the immediate past Minister of Aviation, Mr Hadi Sirika, over the controversial Nigeria Air, which it said it gulped N15.9 billion.
Last Friday, as promised by Mr Sirika, a Nigeria Air-branded aircraft landed at the Nnamdi Azikwe International Airport, Abuja, but hours later, it returned to Ethiopia after it was discovered that the aeroplane had a registration number of Ethiopia Airlines.
There have been controversies surrounding the proposed national carrier for more than six years but the Minister promised that it would become a reality before the end of the administration of Mr Muhammadu Buhari, who handed over the country to his successor, Mr Bola Tinubu, today, Monday, May 29, 2023.
A Nigerian-based anti-corruption group, SecureWorld and Liberty Initiative for Peace (SELIP), wants the EFCC to investigate Mr Sirika for allegedly committing fraud and economic sabotage.
In a petition to the anti-money laundering agency, the group said the unveiling of the national carrier was against a directive of a court, which stopped the process.
In the notice addressed to the EFCC Chairman, Mr Abdulrasheed Bawa, the organisation, through its Executive Director, Mr Mark Adebayo, averred that the Federal High Court sitting in Lagos headed by Justice A.L Allagoa, in a suit filed by the Airline Operators of Nigeria, had granted three separate orders of injunctions, restraining the federal government from taking any step about the Nigeria Air project “but the Minister in a desperate bid to cover up the monumental fraud in the deal elected to flagrantly disobeyed an order of a court of competent jurisdiction and produced a sham called unveiling of Nigeria Air flight last Friday.”
“We are compelled to bring to your attention that the aircraft purportedly unveiled on Friday, May 26, 2023, by Minister Sirika, as the first flight of the national carrier, Nigeria Air, is still in active service of Ethiopia Airlines. We can confirm that the aircraft, a Boeing 737-800 with the registration number ET-APL, has since left the country this weekend for Turkey according to a check on the flight radar; it only transited Nigeria for the farce of a show put up by the minister.
“The flight landing in the country with Ethiopia Airlines’ registration number means Nigeria Air has no Air Operator Certificate. No aircraft can be registered in Nigeria without the carrier having an AOC, which means that the aircraft does not belong to Nigeria Air either as leased or owned equipment. So, Sirika should not be allowed to fool Nigerians,” the group said in the petition.
The group urged the anti-graft agency to make Mr Sirika account for N15.9 billion that has been committed so far to the project by the federal government, alleging that the desperation by the minister is geared towards covering up the misappropriation of funds and monumental fraud.
“The unveiling was a desperate attempt to justify the N15.9 billion appropriated by the federal government to Nigeria Air since 2016.
“The phantom project has continued to lick up budgetary provisions; N1.3 billion was allotted to it in the 2023 budget with an additional N700 million as ‘working capital’ and N200 million as consultancy fee; so, the minister must not be allowed to hoodwink Nigerians with the ‘importation of a rented aircraft into the country and pass it off as a step to the commencement of the operation of the airline days to his exit from office. This act of fraud and economic terrorism must not be allowed to go unpunished,” the petition read.
The group countered Mr Sirika’s claims that Nigeria Air Limited is a private sector-led airline, with only five per cent of the company owned by the Nigerian government, a consortium of entrepreneurs in Nigeria with 46 per cent, and the Ethiopian Airlines with 49 per cent.
“There’s no agreement with the stakeholders in Nigeria, so on what basis has a painted plane be brought in to deceive Nigerians?
“The lack of transparency on funding and alleged zero consideration for local players and national interest is frightening as the proposed Shareholders’ Agreement which is yet to be signed the, reserves all Executive Directors positions for the Ethiopians with Nigerians as deputies,” the group said.
“We have confidence that the EFCC will do justice and timely, too, to get to the bottom of this scam and save Nigeria’s Aviation Industry from the impending doom,” it noted.
By Modupe Gbadeyanka
The federal government has reorganised some agencies under the Ministry of Aviation, with new directorates created for efficiency and the approval of President Muhammadu Buhari obtained for the changes.
A statement from the ministry said the Public Affairs and Consumer Protection, Corporate Services and Aviation Security Directorates had been created to adequately address complaints from stakeholders.
Also, the Aviation Security Directorate was created in the Nigerian Civil Aviation Authority (NCAA) to regulate the activities of AVSEC personnel, especially with their recent arms-bearing status, while the Corporate Services Directorates was saddled with the responsibility of overseeing the Procurement and Planning, Research and Departments.
The disclosure noted that Mr Buhari had approved the appointment of Mr Kabir Yusuf Mohammed as the new Managing Director/Chief Executive Officer of the Federal Airports Authority of Nigeria (FAAN).
Until his appointment, Mr Mohammed was the Regional General Manager, Central Region Airports, FAAN and Chairman of the Aviation Roadmap Implementation Committee.
Similarly, Mr Tayib Odunowo has been appointed the substantive Managing Director of the Nigerian Airspace Management Agency (NAMA). He will take over from Mr Matthew Lawrence Pwajok, who reverts to his substantive position as Director of Operations of the agency.
The Directors-General of the Nigerian Safety Investigation Bureau (NSIB), Mr Akin Olateru, the Nigerian Meteorological Agency (NiMet), Prof Mansur Matazu and Nigerian Civil Aviation Authority (NCAA), Captain Musa Nuhu are to run the remaining course of their tenures in line with the Acts setting up their respective Agencies, while the Rector of the Nigerian College of Aviation Technology Zaria, Captain Alkali Modibo has been granted a one-year extension, also in line with the Act setting up the College.
In order to reposition the Agencies to perform their statutory duties, the Minister of Aviation, Mr Hadi Sirika, has also approved the appointment of some new Directors.
The appointments are:
FAAN:
- Managing Director – Mr Kabir Yusuf Mohammed –
- Human Resources and Admin. – Shehu D. Mohammed
- Commercial and Business Management – Olumuyiwa Femi-Pearse
- Corporate Services – Barr. Azubuike Okorie
- General Manager (Statistics) – Kingsley Uchechukwu Okunji
- General Manager (Special Duties) – Jemilu Abdulrahman
NCAA:
- Director General/CEO – Capt Musa S. Nuhu
- Director, Airworthiness Standards – Engr Gbolahan Abatan
- Director, Aerodrome and Airspace Standards – Engr. Godwin Balang
- Director, Operations – Capt. Ibrahim Danbazau
- Director, Air Transport Regulations – Mr Olaniyi Saraku
- Director, Public Affairs and Consumer Protection – Capt. Chris Najomo
- Director, Aviation Security – Air Cdr Hambali Tukur
- Director, Corporate Services – R. M. Daku (Mrs)
- Company Secretary/Legal Adviser – Mrs Mary Tufano
- General Manager (Audit) – Mrs Dawa Gyaks
- General Manager (Accounts) – Mr Aminu Tasi’u
NSIB
- Director General/CEO – Engr Akin Olateru
- Director, Finance and Accounts – Mr Ori Bassey
- Director, Public Affairs and Consumer Protection – Dr James A. Odaudu
- Director, Corporate Services – Oliobi Godfrey Ikemefuna
- Transport Investigation – Capt Tosin Odulaja
- Company Secretary/Legal Adviser – Barr. Illitrus Ahmadu
NIMET:
- Director General/CEO – Prof Mansur Bako Matazu
- Human Resources and Admin. – Saleh Tukur Yusuf
- Director , Weather Forecasting Services – Daniel Okafor Chibueze
- Public Affairs and Consumer Protection – Ahmed A. Sanusi
- Director, Research and Training, Prof Effiong Essien Oku
NAMA:
- Director General/CEO – Engr A. Tayib Odunowo
- Director, Operations – Matthew Lawrence Pwajok
- Director, Public Affairs and Consumer Protection – Khalid Emele
- Corporate Services – Mr Uchendu Chibuzo Oji
- General Manager, Public Affairs – Amaka Udeh Walker (Mrs)
