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The Nigerian tourism and hospitality industry is making significant strides through healthy partnerships
Nigeria was expected to be the fastest-growing hospitality market with a projected 12 percent compound annual increase from 2019 to 2023 according to a PwC projection. In early 2020 however, the COVID-19 pandemic spread globally, and the tourism industry was one of the worst-hit.
Globally, the tourism industry contributes about 10 per cent to the global GDP. This was expected to rise in four years with significant upward movement in Mauritius, Kenya, Nigeria, and South Africa. In Nigeria, the contribution of travel and tourism to Nigeria’s GDP was 5.1 per cent in 2019. In 2020 however, the upward trajectory slowed down due to the pandemic.
With the ban on international and even local travel shortly after the outbreak of the viral infection in Nigeria, non-essential travels were suspended. Travel for work and holidays were put on hold and the nation as well as the rest of the world was forced to go virtual as a method of work and entertainment. Due to this, hotels, tourist attractions, and air transportation were some of the industries hinged on tourism that were badly affected.
Job loss in the travel and tourism industry
The World Travel & Tourism Council estimates that 1 in 10 workers in the world work in the hospitality industry. This translates to 1 in 10 workers losing their jobs as a result of the industry being grounded because of the pandemic. From March 2020 to around March 2021, many countries announced a ban on international travel and closure of restaurants and hotels while also limiting gatherings. All these measures were put in place to reduce the spread of the virus. However, they also affected employment in the travel and hospitality sector.
The Regional Director of the World Travel and Tourism Council, Andrew Brown revealed that “$4.5tn was lost by the tourism and hospitality sectors as a result of the COVID-19 pandemic worldwide and over 770,000 jobs were lost in the sector in Nigeria alone.”
This figure also closely follows the estimation that 1 in 10 Nigerians lost his/her job in the tourism industry which also affected those whose goods or services are either directly or indirectly connected to it.For example, the production of in-flight magazines in Nigeria took a hit when the tourism industry suffered as a result of the pandemic. While magazine production would be appropriately considered a media and communication sector, its target audience is tied to the travel industry which ultimately meant that those who worked in the editorial, photography, copywriting, news gathering, typesetting, printing, and distribution department of the magazine lost their jobs during the aforementioned period.
Companies that also provide cleaning services, entertainment and advertising for travel and tourism companies also had to lay off their workers, reduce their pay or in some cases, keep them officially employed while not paying them during the heat of the COVID-19 pandemic.
Beyond the examples mentioned above, there are more sectors and industries whose existence is reliant on providing goods and services to the tourism sector or are part of the supply chain that need the industry to thrive for them to benefit. The people in these sectors belong to the so-called ‘other 9’ whose industries are not considered a part of travel and tourism but essentially dependent on the sustained operation of the tourism sector for survivability.
What does the future hold?
As the world is trying to adapt to the changes brought by the pandemic, the hospitality industry is also making a steady albeit slow return. Research by Jenny Southan, a travel editor and founder of Globetrender, projected that “as people think more carefully about the way they travel, they will seek out hotels and travel companies that are doing everything they can to minimise their impact on the planet. We can also expect accreditation to gain prominence, as consumers look for reassurance from legitimate “eco-tourism” certifications (Visitors) will want to book trips that leave them feeling better than before when they return home. Wellness tourism will be increasingly popular.”
Globally, there is an optimistic projection that the hospitality industry will make a remarkable return. However, only the prepared can make a quick return, and to do so requires understanding the uniquely changing needs of customers and clients. Nigeria needs to take a proactive approach in order to be at par with global best practices and not wait for others to take advantage of the relatively small market that is just making a return.
A Harvard Business Review article referenced partnerships between or among companies as a means for providing shortcuts for companies racing to improve their production efficiency and quality control. This symbiotic relationship provides an essential opportunity for rapid growth in a period where quick recovery and adaptation to change is necessary.
According to Deloitte, “In an environment of dramatically lower revenues, high fixed costs, less than optimal asset returns, and the need to conserve capital, hospitality organisations will need to determine which areas to prioritise and invest in. They will need to find the right balance between investment and conservation, one that achieves the highest ROI in the near to medium term. Some of these decisions will endure; others may not. But the decisions made in the months to come will have a lasting impact on the operating models of the hospitality sector for years to come.”
This level of preparedness is evident in the way Radisson Blu Anchorage Hotel, a respected hospitality brand, and part of Nigeria’s leading investment holding company, Honeywell Group Limited (HGL), is fostering an alliance with the Bank of Industry to provide a basis for the recovery of the hospitality industry in Nigeria.
This partnership is hinged on mutual respect nurtured by the positive track record of Honeywell group over the years. Our impressive performance before the pandemic coupled with a sustained positive service delivery during the pandemic shows a clear path of contributing toward the growth of Nigeria’s economy.
Nigeria needs more of these important partnerships in the hospitality sector to give it a much-needed boost.
Our relationship with the BOI has been a beneficial relationship and the Bank of Industry has proven to be a valuable business partner. The bank has supported us in building our brand as a foremost hospitality business.”
With this sort of institutional support long term, the projected growth in Nigeria’s tourism industry which faltered due to the pandemic, can recover, and possibly reach the expected height.
According to Deloitte, “the COVID-19 pandemic will eventually fade. The economy will recover, and the hospitality sector—from restaurants to hotels, casinos to sports—will regain its footing and look forward with confidence to a successful, thriving future. Now is the time for companies to act, adapt to the new normal, position themselves for nimbleness, and thrive in the years ahead.”
