Recession: Five-star hotels, others record low patronage

Dayo Oketola, Kamarudeen Ogundele, Samuel Awoyinfa, Adelani Adepegba,
Success Nwogu, Gbenro Adeoye and Peter Dada

As the current economic crisis in the country bites harder, five-star hotels and other lowely-rated ones  across the country have witnessed a drastic drop in patronage, investigations by 

Saturday PUNCH have shown.

It was learnt that five-star hotels have been dealing with increasing operational costs amid low patronage.

Findings showed that patronage of five-star hotels in some states has dropped by at least 20 per cent while their operating costs have increased by as much as 40 per cent.

For instance, the General Manager, Radisson Blu Anchorage Hotel, Victoria Island, Lagos, Mr. Kevin Kamau, said the economic crisis had impacted negatively on the hotel’s business and that its occupancy rate had been down by about 25 per cent within the period.

“Occupancy rate is down by 20 to 25 per cent; it is very, very down. We used to have up to 75 per cent occupancy rate, but now we have about 50 per cent. For instance, there are just two of us in the bar now on a Friday; before, there would be up to 20 of us here.

“There is less number of people coming into Nigeria, so occupancy rate is down. Although there has been an increase in domestic tourism, we have few guests in our rooms, in the restaurants and few people having meetings in the hotel.”

Kamau, who also lamented the increasing cost of operations, however, said the management of the hotel was not considering reducing its workforce as he believed that the economy of the country would bounce back between 12 and 36 months.

Rather, Kamau said the hotel was looking at creative ways to reduce its operational costs like investing in renewable energy and relying on locally made products.

A source at the Federal Palace Hotel, Lagos, who spoke on condition of anonymity, also said the hotel was badly hit by the recession but had been taking measures to cope with the harsh economic situation.

The source said one of the ways by which the management of the hotel had reduced its overhead costs was by recently reducing its workforce.

“We (workers) have all felt it because the economic crisis really affected the hotel, which was why the management recently reduced its staff strength, and in addition to that, it has also made its room rates more flexible to attract more patronage,” the source said.

An official at Eko Hotel and Suites, Lagos, who spoke on condition of anonymity, said the hotel had also not been immune to the challenges of doing business in the country’s current harsh economic environment.

The source said, “It has been tough for us at Eko Hotel and Suites, but we are glad that there was no sacking of workers as it was done in some other hotels around. What cushioned the effects a bit for us is our many corporate customers, many of which hold events.

“However, it has been a hard time for the hotel business. Our occupancy rate has dropped considerably, but I’m not sure of the percentage.”

Some operators of five-star hotels in the Federal Capital Territory have said they might embark on massive sacking of employees if the economy does not improve on time.

The General Manager, Hawthorn Suites, Garki, Jubril Aliyu, said hotels had been finding it difficult to break even since the recession set in. Aliyu said the number of lodgers in hotels had dropped significantly, noting that many had even shut down due to poor patronage and inability to meet their responsibilities to their workers and shareholders.

“We are not disengaging workers yet because we don’t want to add to the unemployment crisis in the country, but if the economy does not improve, we may have to downsize,” he said.

An official of NICON Luxury Hotel, Abuja, noted that the number of businessmen and contractors lodging in the hotel had dropped “precipitously” since last year.

He blamed the government for the drop in patronage, saying that its refusal to stimulate the economy by spending money and paying contractors had affected the hospitality sector.

Another worker at Protea Hotel, Asokoro, noted that the conference halls had not been booked in the last three months, noting that many rooms had also not been used for a long time.

Other hotel operators who spoke to Saturday PUNCH said they were struggling to survive, saying that events like conferences, seminars and companies’ Annual General Meetings that used to attract visitors to the city had not been held in recent times.

At Jora Hotel in Port Harcourt, Rivers State, a senior worker, who simply identified herself as Glory, said the economic recession had affected patronage.

She said that while room prices had remained unchanged, poor power supply had made hotel business more difficult as it relies on the use of generators for power supply most times.

Glory added that the challenges had made it difficult for the hotel’s management to pay workers’ salaries, which had led to some employees voluntarily resigning.

The President, Association of Hotel Owners, Kwara State, Chief Omogbenle Adeyemi, and the association’s immediate Secretary, Mr. Dauda Akande, said that the patronage in hotels had reduced by between 60 and 80 per cent in the state.

Adeyemi lamented that already, many hotel workers had been retrenched, adding that if the situation did not improve soon, more jobs would be lost.

Adeyemi said, “Things are so bad that we are just struggling to survive. Over 80 per cent of our patronage is gone. Some hotel owners have started retrenching and if things do not improve, even the remaining workers may have to be sacked.”

At Bagari Suites Limited, Bauchi, Bauchi State, an official who pleaded anonymity said the number of guests had reduced significantly.

Source link