COVID-19 and the Many Troubles of the Hospitality Business

Restaurant and hospitality industries are crucial socio-economic sectors that contribute immensely to the global economy. However, these sectors are vulnerable and sensitive to natural hazards such as global pandemic and any resultant economic downturn.

The hospitality sector is undoubtedly one of the hardest hit by COVID-19 pandemic. The coronavirus onslaught last year took a huge toll on hotels and night businesses which of course affected revenue generation.

Nigeria, Africa’s most populous nation, and the largest assembly of night life has not been spared by the pandemic. The growth in Nigeria is attributed to a growing middle class, rapid urbanisation and an influx of foreigners.

Taking a look at the market and economic projection prior to the pandemic, Nigeria, Kenya Mauritius had the fastest growing market with increases of 20%, 14.6%, 11.7% respectively in 2018.

With Nigerian growing affluence, it was expected that consumer tourism will become a more popular sector attracting visitors interested in local culture.

It was also projected that over the next few years, Nigeria will become the fastest growing tourism market with a 12% compound annual increase with a number of new hotels entering the market.

According to the National Bureau of Statistics (NBS), the tourism and hospitality industry was expected to rise in 2018 and generate approximately 1.3 million jobs. The report also revealed that it generated 1.2 million direct jobs in 2017 compared to about 650,000 it generated in 2016.

Worried by how this situation is affecting a promising industry, Analysts said that how Nigeria is processing this data today is quite important.

Reacting to this, Micheal Omisere, a hotel management consultant disclosed that the lockdown hit the industry very hard. For him, it is more or less the closure of the airspace. That way, there was near zero occupancy in most hotels. It has changed the industry to where players must look inward and develop the local market to get more patronage.

While reacting on business recovery in 2021, he disclosed that it requires counting losses and re-strategizing. What most operators do,  because people still want to come out and have fun, is to create more outdoor spaces in their facilities in line with COVID-19 guidelines. They also began to admit guests after the ease of lockdown. Omisere added that they were able to pick their businesses slowly, although there is nothing like total recovery yet.

While facilities are not utilized during the lockdown, business survival now depends on creativity and customer behavioral study. Isaac Akpanobi, a hotel manager hinted that they did  some sort of study and realised that they need to create more trust between customers and their brand. Also, during the lockdown, they started doing deliveries, and many clients patronised them.

For him, one thing that keeps them moving is keeping to standards by not compromising at the level of quality of  food and top- notch service delivery that guests are used to.

Speaking on how operators are feeling about government regulations as businesses pick slowly, especially regarding limitations on operational hours and compliance checks, Akpanobi pointed out that, first and foremost, they comply with government guidelines hundred percent. And they are very grateful because those guidelines were put together for the benefit of all.

In terms of revenue drop, he said it’s more than 50% compared to 2019. He however said that they were paying their staff who were about 500 in number their full salaries for about four months at the beginning of the lockdown, but they were later forced to close for three months and reopen with fewer staff.

Before their reopening, he said because they want their staff and their family members and their guests to be healthy, they ran a COVID-19 test for them at the rate of N40,000 per person.

Continuing, he disclosed that, there is need for both operators and clients to adhere strictly to safety measures as stipulated by Nigeria Centre for Disease Control (NCDC). Majority of guests are understanding and complying, and there is a group that says the rules do not apply to them. We have security personnel in different locations reminding our guests of the safety measures.

Meanwhile, consumers’ spending power is also badly affected by the pandemic, and how business handlers are adapting themselves to meet the changing needs of consumers from the pricing point is very important.

For some of the operators, the biggest challenge has been the rise in cost. They make efforts to maintain prices, but at the backend, lots of things are being imported. The alcohol segment for example, is largely affected by rise in cost and they have to cushion it.

Read Also: COVID19: A Second Wave in Europe

Because Nigeria’s hospitality business is also having its own share of the new normal, alongside other countries of the world, innovation, competitive edge, safety, and uncompromising brand equity is dictating the new facet of things in the industry that has come to stay.

It’s also worthy of note that many players feel everything is tied to COVID-19 vaccine. If consumers can get the vaccine, many believe activities will return to normal in the sector.

Charles Danson

Categories: Features, Health

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