Lagos, Nigeria.  Two words that evoke polarized emotions!  Some people who have lived here for decades think it is great.  Others, mostly short-term expatriates and business visitors, can’t wait to leave.  After 13 years here, travelling in and out of the country sometimes three of four times a month, I can understand both points of view, but must stress that it is just not as bad as many make out!  Security concerns are, I reckon, overblown – which doesn’t mean you throw caution to the winds and walk through Mushin at night with your new Rolex on display!  Be aware, as they say.

Arriving on an international flight at Lagos airport can be a real test of one’s sense of humour/patience/sanity, but not necessarily in that order.  Whatever they do to “improve” the place seems to backfire, and as one queues for ages for immigration, one has more than enough time to figure out how they could do it differently to make it easier for passengers.  Just don’t ask “why didn’t they…..?”, it’s not worth it.  And don’t point out the problems to any of the immigration facilities, nothing you can say will improve matters, and you might find you have committed some felony by opening your mouth.

Grin and bear it.  Most flights from Europe, plus SAA, arrive in Lagos in the early evening, and the airport is hot and chaotic – for that reason don’t wear thick clothes (you don’t need them in Lagos anyway, at any time), and take a good book to read in the queue.

Through immigration, take a car hire (with driver, don’t even think of driving yourself, you’ll soon find out why) from one of the big names in the arrivals hall.  There are dozens of touts offering taxis, ignore the lot of them, their cars are rubbish. And you never do know whether they are safe (be aware….).  Keep your car doors locked at all time.  You can also exchange money at the Bureau de Change in the airport – touts are, again, outside, and to be avoided, for fear of fake notes, not to mention the police.

On the road in your taxi, you’ll see why driving itself is not recommended!  The roads are incredibly congested for most of the time.  And it is to be doubted whether the driving test (Ed. You think they took a driving test?!) included anything about lane discipline, or consideration for other road users.  So, sit back, with that good book you brought, and let the driver fight it out.  The airport is in the north of the city, where there are a lot of businesses, industrial concerns, all the airlines and the Lagos State government – if that’s where you need to be, it is a 20 minute drive from the international terminal – or make that an hour in heavy traffic!

Hotels in Ikeja include the Sheraton, currently undergoing a complete face lift, 3 Protea hotels and a couple of Best Westerns, plus a brace of Ibis hotels.  Under construction are a Renaissance, possibly opening in 2016, and a Marriott, slated for 2018.

Downtown Lagos, which is Victoria Island (VI), Ikoyi, Lagos Island and Lekki, is where most of the business activity is located, and consequently the main hotels, restaurants, bars and other leisure spaces.  To get there, your driver will take you across the Third Mainland Bridge, an awesome piece of engineering, from which you will see the lagoon that characterizes Lagos – wherever you look, you see water.  It was once a very beautiful city, of which you sometimes see glimpses.

The trouble with Third Mainland is that it is one of only two routes from the airport to the south of the city, and although it is the best of the two, it is quite incredibly congested during peak hours.  Even at 5.30am the Bridge is clogged going south, and in the afternoon the traffic starts building up from 4pm (got another book with you?!).  Outside of those periods, it is terrific.

Down in the south of the city, there are many hotels from which to choose, from the gigantic Eko Hotel in Victoria Island to the small boutique-style Wheatbaker and George hotels in Ikoyi.  Best to choose a hotel within easy reach of where you are doing business, because of traffic.  Global and regional brands such as Radisson Blu, InterContinental, Best Western, Southern Sun and Four Points all have a presence in VI and Ikoyi, and expect to pay anything from US$300 upwards per night, breakfast extra.  Yes, Lagos is an expensive city.  There are also several very good small, independent hotels, such as La Cour and Bogobiri, which offer value for money, but not the extensive facilities available in the big boys.

All the big hotels have a variety of dining experiences – both the InterContinental and the Eko have Chinese restaurants, and buffets serving Nigerian and “foreign” dishes are popular – try the one at the Southern Sun.  Eating out is expensive, but the portions tend to be large, something to remember when ordering in a Chinese restaurant!  Try Talindos for great steak, Ocean Blue for fish, ChinaVille for Chinese, and Lagoon for Lebanese and for a Brazilian Churrasco.  For more casual eating and drinking, try Shades (a new Sports Bar, with a big screen) and Crust and Cream.  The latter is a patisserie, with a great ambience and good food, but the service is slow.  But then, with the traffic and all that, you can never do anything in Lagos in a hurry!

To get around the city, take an air-conditioned car hire from your hotel – there are yellow taxis cruising the streets, but whilst cheap, their cars are pretty dreadful, without air-conditioning, so I advise against it.  Whether in a car hire or a taxi, you have to know how to get where you are going, as most of the drivers don’t know street or place names.  The concierge desks in the hotels are there to help, and Google maps has good coverage of the city.

If you have time for souvenir shopping, try Lekki market, about 30 minutes from VI, and whilst on the way there, drop into Nike’s Art gallery, which is just off the Lekki-Epe Expressway.

On the way out of Lagos, leave 5 hours before your flight’s scheduled departure time. Yes, that’s right, 5 hours.  You just cannot be sure of the traffic!  A journey which would take you 30 minutes with no traffic, could take 3 hours at peak periods.

At the airport, it is all fairly normal, well, as normal as it was coming in.  queues to check in for the USA and European flights can be lengthy, but if you only have hand baggage you can normally “prioritise yourself”, if you know what I mean.  There are lots of business class lounges airside, most of which take Priority Pass, I like the SDS one on the ground floor, and the ASL one upstairs.  If you can’t get into any of them, the Heineken lounge (the big green one!) is nice, and has free Wi-Fi (and coffee, and beer, of course, but you have to pay for that).

So, when are we seeing you back here??!!

Trevor Ward

W Hospitality Group, Lagos           

trevor.ward@w-hospitalitygroup.com

From west to east

I was walking down a Nairobi street the other day, and a local chap falls into step with me and greets me in a most friendly way with “How do you like Africa?!”.  I was so surprised, I just said “Fine” and hurried away.  I wasn’t concerned for my safety, despite central Nairobi’s reputation for street crime, I was just surprised at the question itself – how do I like Africa!

It set me thinking, about how the perception, or single story, of my friend, a Kenyan, who sees amzungu (white man in Swahili) and assumes I am a visitor from Europe or the USA.  I am often reminded of ChimamandaNgoziAdichie, the Nigerian author, who put it so well in her TED talk “The danger of the single story”, pointing out that we need a variety of different, overlapping inputs for our outlook on life to be the reality that it is.  Little did my Kenyan friend know that I have lived in Nigeria for almost 13 years, and therefore not “fresh fish”!

But the other factor that surprised me was that he asked me about Africa, not Kenya or Nairobi, Africa!  If you met a foreigner on the streets of Berlin you wouldn’t ask “how do you like Europe?”, would you?

So even Africans generalise about Africa, apparently.  Why is that?  We have more countries in Africa than on any other continent, 54 nations since the creation of South Sudan in 2011, with immense diversity amongst them – not surprising when you consider that the land area of Africa is greater than that of Europe, North America, China and India combined.

Hotel investors do not decide to invest in Africa, they look at countries and cities, and at projects, assessing their attractiveness in market terms (demand for the product or service to be offered) and the risks (economic, political etc.).  You can’t do that in a single assessment of “Africa”!

So what’s going on currently in the various countries of Africa?

Well, a noticeable trend is that there has been a shift in focus away from the oil-producing nations of West Africa to the more diversified countries of East Africa (with apologies for generalising, but this time it is on a more local level!).  With one or two exceptions, West Africa has been battered by a “triple whammy” in the last two years, starting with the Ebola outbreak in mid-2014, then the collapse in the oil price shortly afterwards, and this year the China impact, the reduction in demand from China for iron ore and other primary products.  Each has had its own “ripple effect”, the Ebola virus affecting travel and consumer demand throughout the region (and beyond), the oil price crash bringing devaluations in the currencies of Nigeria and other countries, and the China impact reducing the inflow of concessionary funds for new projects.

One of the exceptions in West Africa is Cote d’Ivoire, which has put its troubled past firmly behind it, and is seeing its much more diversified economy grow by almost 8% each year (IMF WEO October 2015), and inflation of 2% or lower.  The key there is the fact that its economy is much more diversified than its neighbours’.  GDP growth in Nigeria is down to just 2% in Q3, due mostly to the price of oil – we export virtually nothing else.  In Sierra Leone, the reduction in the world price of iron ore resulted in a shut-down of the entire industry, and the IMF are forecasting a GDP growth of negative 24% this year.

In this scenario, demand for hotels is down severely – from occupancies of over 80% in Lagos in the previous decade, the outlook for the end of 2015 is for an average for the year of about 50%, and this in the absence of any significant new supply.  We believe there will be an upturn, now that the federal government’s ministers have been appointed (5½ months after the transfer of power from PDP to APC) – but it is difficult to know when.  The good news for hoteliers in Lagos is that no new supply is expected to enter the market for at least three years, so occupancies and average room rates should increase.  The lack of new supply is for the most part another consequence of the oil price crash, the subsequent currency devaluation, and the shortage of foreign exchange – it has become even more difficult to finance projects here, the uncertainty regarding the future is just too much at present.  Projects that were underway, such as the Marriott and the Meridien, are facing financial and other challenges.

Over in East Africa, particularly Ethiopia and Kenya, there is considerable activity in new hotel development.  The Marriott Executive Apartments in Addis Ababa opened in early October, and the Radisson Blu in Nairobi opened in mid-November.  Throughout Nairobi, there is considerable construction activity, Including in new satellite towns such as Two Rivers, which create demand for new hotels, such as the City Lodge.  Mövenpick have just announced a new deal in Nairobi, as have Starwood, for a Four Points by Sheraton at the airport.  Unlike in West Africa, we see these projects actually happening……The average occupancy in Nairobi and Addis Ababa is between 55% and 60%, not much higher than Lagos, but both cities have had high levels of new supply recently.

Looking at the IMF’s data, we see that their forecasts for GDP growth reveal why the countries of East Africa are receiving more focus from investors.  The 2015 forecast for sub-Saharan Africa is 3.8%, down from 5% in 2014.  With the exception of Burundi, torn again with civil strife, all the countries in East Africa are expected to experience growth significantly above the regional average - Djibouti 6.5%, Ethiopia 8.7%, Kenya 6.5%, Rwanda 6.5%, Tanzania 6.9% and Uganda 5.2%, and almost all are experiencing greater growth than in 2014.

The reasons?  Because of a lack of minerals or other primary products, their economies are far more diversified than those in West Africa, and some in southern Africa (e.g. Zambia).  Further, as net fuel importers, they have benefited from lower prices.

About 5 years ago, the story was all about “Africa”, and at that time the majority of the then-53 countries on the vast continent were experiencing rapid growth.  At 6.6% in 2010, sub-Saharan Africa had the highest growth in the world.  Today, times have changed, and it is imperative not to talk about Africa, but about countries and cities.

How do I like Africa?  Well, like the curate’s egg, it is good, if not excellent, in parts!  As for the other parts, let’s wait and see!

Trevor Ward

W Hospitality Group, Lagos

trevor.ward@w-hospitalitygroup.com

 

At long last, Sierra Leone has been officially declared as Ebola-free, with no new cases for 42 days.  Indeed a cause for celebration, and the famous Cotton Tree in the centre of Freetown was the scene of all-night rejoicing at the beginning of November.

The hit to the economy has been severe.  In 2014, real GDP growth was, according to the IMF, 7.1 per cent, way above the sub-Saharan average of 5 per cent, and in the top 5 in the region.  In 2015, the IMF’s projection is for a decrease in GDP of almost 24 per cent, which is in the bottom five globally.  Ouch.  That’s not going to create jobs, far from it, as one cause of the decline is the cessation of iron ore mining in April.

I visited Sierra Leone at the beginning of October, my first visit in six years.  Since then, the Radisson Blu hotel has opened, and the Hilton is under construction.  The beaches have remained as fantastic as ever, and the people are as warm and welcoming as they have ever been.

So my message is, Sierra Leone is Ebola-free, it is history, so is the civil war, let’s please return to business as normal.

But the government is in no position to do much to spread that message, they have no funds to attend trade fairs, to advertise the country’s attractions – but there are a couple of websites, one from the private sector - www.visitsierraleone.org – and the other the national tourist board - www.welcometosierraleone.sl.  On the former, you can apply for an entry visa on-line!

Why am I promoting Sierra Leone like this?  Because we in the African travel industry need to give them all the help we can.  Heaven knows, the government has its work cut out with the recovery programme, preventative measures, rebuilding the healthcare sector, the economy as a whole, at a time when its foreign exchange earnings are close to zero.  The tourism board has always been underfunded, and I can’t seeing the sector getting too high a priority for a while.

And because, once upon a time, Sierra Leone had a thriving tourism industry, based on its beautiful natural attributes – the beaches I mentioned earlier, the mountains and rain forests, the birds and wildlife, the culture and heritage………There is no real reason why the country couldn’t get back to where it was in the 1980s.  Then, an estimated 100,000 tourists visited annually, mostly Europeans (French and British), and mostly for those beaches.  In 1987, the Bounty Bar’s Taste of Paradise TV advert was filmed on River Number 2 beach, just to the south of Freetown.  I bet that, if you can remember it, you thought it was filmed in the Caribbean?!

Well, actually, there are a few reasons why tourism will struggle, not just the lack of funding for promotion.  The government also has no funds for training schools, and the service in hotels and restaurants, at least those I visited, comes more often with a snarl than with a smile.  Many of the hotels are run down due to a lack of funds for maintenance.

Getting to the country is expensive, because of the lack of airlift – a bit of a chicken and egg situation, as usual, with carriers needing more passengers to make flights profitable.  The cheapest economy class ticket from London to Freetown in November is just over US$1,000, via Paris – there are currently no direct flights.

I travelled from Lagos on Air Cote d’Ivoire through Abidjan, but we stopped in Accra and Monrovia, so that was four flights!  Nigeria, with its vast population, high propensity for travel, and no need for a visa, should be a good market to target (Nigerians also love to party, and Freetown is famous for its nightlife!), but not when it takes so long to get there.

Airlines currently operating, in addition to Air Cote d’Ivoire, are Kenya Airways, Air France, Brussels and Royal Air Maroc.

Getting around the country can also be difficult right now, with many roads in bad repair, particularly in the rainy season.  But there is hope at hand there, with a new highway nearing completion between Freetown and the Peninsula, to the south, linking such wonderfully-named places as River Number 2, Big Water, Black Johnson and Waterloo to the capital in less than 30 minutes, places which are currently 1½ hours or more.

Another challenge is that the international airport at Lungi is 20 to 30 minutes’ boat ride across the mouth of the Sierra Leone River from Freetown.  The airport isn’t bad, having been renovated not that long ago, but the road from the airport to the boat station is unmade, and boats aren’t everyone’s cup of tea (certainly not mine!).  Having said that, 100,000 tourists a year didn’t seem to mind that back in the 1980s…..And the government reports that a Chinese construction company has started work on the new Mamamah International Airport, 38 miles south of Freetown, which means I will no longer have to suffer that ruddy boat!  The development of the new airport will open up the Peninsula for new tourism facilities, and the new highway will mean greater day visitation to the resorts and restaurants there from the inhabitants of Freetown.

There you have it, warts and all.  I like Sierra Leone.  All will agree that the country has been dealt a really bad hand in the last 25 years.  But, ironically and somewhat sadly, the Ebola outbreak has turned the world’s attention back on the country, and the provision of donor funding for the recovery programme is already kick-starting development again.

Katrina Manson, author of the Bradt Guide to Sierra Leone, says:  Few people know about Sierra Leone's sweeping many-coloured beaches, its swim-perfect seas and glorious rainforest-mountain backdrops. They don't know you can dine on fresh-grilled lobster and refresh yourself with a cool beer beside the ocean. They don't know about the country's threatened primates and rare exotic birdlife, or that it is home to the region's highest mountain. They are unaware that its capital is one of the safest cities in Africa and that people dance with a mesmerising lust for life until after dawn. Or that, despite the decade of war, the nation's tenacity, affection and spirit is what really defines it.

Well, you know it now!

Trevor Ward

W Hospitality Group, Lagos

trevor.ward@w-hospitalitygroup.com

 

The international anhotel chains signed a record 79 deals for new hotels in 2014, and there are likely to be more hotels built in Africa in the next five years than in any previous period.  There are several markets which are in need of new hotels, either because of a shortage in the face of demand growth or, quite often, due to the dire condition of the existing supply.

There’s no universal, reliable estimate for the number of hotels in Africa, nor is there any information on how many are under construction.  According to our pipeline research, of the c50,000 hotel rooms in the chains’ pipelines at the beginning of this year, 63 per cent, or around 31,300 rooms, are actually under construction, in 36 countries.  That’s fewer than 900 per country.  But this doesn’t capture the non-branded hotels, of which there are many.

These new hotels are not evenly spread.  In some markets, such as Luanda, the number of non-chain hotel rooms under construction exceeds the branded ones by a considerable margin.  A close examination of individual markets shows that, whilst the country average in the chains’ pipelines is below 900 rooms, in some cities the addition to the supply of unbranded hotels, some of a considerable size (e.g. the 280-room Emerald hotel in Lagos) does appear to indicate that there might be oversupply on the horizon.

Demand for hotel accommodation generally grows organically, in single digits – 5 to 9 per cent annual growth would be considered very healthy, higher than the annual growth of c4.5 per cent in international tourist arrivals.  On a one-off basis, the opening of a new convention centre, like the one planned for Calabar, can result in higher growth, this time supply-led.  But hotels open all at once, not gradually to match demand growth, and a new hotel is slowly absorbed into the market.  But on opening, a hotel with 300 rooms can increase the supply in a market with, say, 2,000 existing rooms by 15 per cent, way above “normal” demand growth.

The threat of oversupply is, however, very often merely on paper, and with the exception of South Africa, where the 2010 FIFA World Cup generated over-enthusiasm in terms of hotel building, has never materialised.

If all the hotel projects in the pipeline for Lagos, plus those currently being studied, were to go ahead, there will be oversupply.  But an analysis of the c4,300 rooms in the Lagos pipeline reveals that whilst 52 per cent, c2,200 rooms, are “under construction”; of those over 1,000 rooms have at one time had work undertaken on site, but are now stalled, the site closed.  That leaves just 28 per cent of the pipeline actively being built.  Of the total, we consider that only 26 per cent will be built and open to the public, 45 per cent might happen, and the rest are unlikely to see the light of day.

It is a peculiar feature of the African hotel market (much worse in some than in others) that signing a management agreement doesn’t mean that the project will ever be realised, nor does starting construction of a hotel mean it will be completed.

Looking at the hotel chains’ pipelines, no fewer than 60 deals with 13,500 rooms, over 25 per cent of the total, were signed between 2006 and 2011, and really should have opened by now, but for many reasons (most often a lack of finance) they are still just paperwork or, in some cases, unfinished monuments.  And again, many independent hotels are also standing unfinished - Abuja, for example, has many half-built hotels, mostly of 100 rooms or fewer, which never got past the concrete-pouring stage, and which have been abandoned, in some cases for several years.  In Lagos, RDDL’s Le Meridien has remained as a shell for 5 years, with no work underway on site, and there appear to be problems with the Marriott on Victoria Island, where the site is also shut down.

But oversupply, if it ever happens, is a temporary phenomenon.  Organic growth in demand tends to sort it out, especially as new investors are deterred from the market.  Further, more supply can actually create demand, due to the increased spend on marketing the destination by the hotels themselves, and as the addition of new rooms can mean that larger events, such as conventions, can be accommodated.

Trevor Ward

W Hospitality Group, Lagos           

trevor.ward@w-hospitalitygroup.com

 

As evidenced by the record number of new hotel deals signed by the international and regional (African) hotel chains (see Ai May/June 2015 edition), there are likely to be more hotels built in Africa in the next five years than in any previous period.  There are several markets which are in need of new hotels, either because of a shortage in the face of demand growth or, quite often, the dire condition of the existing supply.  Hotels are a vital part of the commercial infrastructure of a city or destination, providing potential investors with places to stay and conduct their business.  Without modern hotel rooms up to international standards, all but the most intrepid investors might be tempted to do business elsewhere.

Our pipeline research looks only at the deals signed by the hotel chains, those new properties that will be managed by a hotel group and/or branded by them.  That means, therefore, that we do not, we cannot, capture all those hotels planned or under construction which will not be chain-managed or branded.  There are too many of them, there is no central register to consult, and oftentimes they are “mushroom hotels”, popping up almost overnight, with no signboards on the construction site, and only those directly involved in the project knowing that it is a hotel they are building!

There’s no universal, reliable estimate for the number of hotels in Africa (and I’m not going to digress into a discussion of the definition of a hotel!), nor is there any estimate of how many are under construction.  According to our research, of the c50,000 hotel rooms in the chains’ pipelines, 63 per cent, or around 31,300 rooms, are actually under construction, in 36 countries.  That’s fewer than 900 per country.

But of course they are not evenly spread, and in some markets, such as Luanda, the number of non-chain hotel rooms under construction exceeds the branded ones by a considerable margin.  The same in Nairobi, a market which has always had a large, unbranded supply of quality hotels, whilst in Kigali the branded supply dominates the development pipeline.

So a close examination of individual markets shows that, whilst the country average in the chains’ pipelines is below 900 rooms currently being built, in some cities the addition of unbranded hotels, some of a considerable size (e.g. the former InterContinental hotel in Luanda, now unbranded, with almost 400 rooms) does appear to indicate that there could be oversupply on the horizon.

Demand for hotel rooms typically grows organically, driven in cities by economic growth, in single digits – 5 to 9 per cent annual growth would be considered very healthy, higher than the

trend growth of c4.5 per cent in international tourist arrivals annually.  On a one-off basis, the opening of a new convention centre can result in higher growth, this time supply-led.  But hotels

open all at once, not gradually to match demand growth – I call it the “pig-in-the-python” (picture the pig swallowed whole by the python, and slowly absorbed – yes, yuk!), so too a new hotel is slowly absorbed into the market.  But on opening, a hotel with 400 rooms can increase the supply in a market with, say, 2,500 existing rooms by 16 per cent, way above “normal” demand growth.

Now, I have been working in Africa for more than 25 years, and I have been told that oversupply is a threat time and time again during that period – but so far it has never materialised.  How come?

Well, it is a peculiarity of the African hotel market (much worse in some than in others) that signing a management agreement doesn’t mean that the project will ever be realised.  Further, starting construction of a hotel doesn’t mean it will be completed.

Looking at the chains’ pipelines, between 2006 and 2011, no fewer than 60 deals with 13,500 rooms, over 25 per cent of the total, were signed, and really should have opened by now, but for many reasons (most often a lack of finance) they are still just paperwork or, in some cases, unfinished monuments to unfulfilled promise.  And again, many independent hotels are also standing unfinished - Abuja, for example, has many half-built hotels, mostly of 100 rooms or fewer, which never got past the concrete-pouring stage, and which have been abandoned, in some cases for several years.

Will they ever open?

That, for any investor, is a critical question.  The market for any product or service, including hotel rooms, is a function of supply and demand.  If there is too much supply, then each participant’s market share goes down and – sometimes but not always – so do prices, both of which will reduce profitability and therefore viability of the project.

If all the hotel projects in the pipeline for Lagos, plus those currently being studied, were to go ahead, there will be oversupply.  There, I have said it, Lagos might be oversupplied.  As my home base, it is a market we study very carefully, trying to capture both the chain hotels as well as the larger, known independent projects.  Here’s my analysis of the 4,291 rooms in the Lagos pipeline: 52 per cent, c2,200 rooms, are “under construction”; of those, 730 rooms have at one time had work undertaken on site, but are now stalled, the site closed, and in one case it is more than 4½ years since any work was carried out there; that leaves just 35 per cent of the pipeline actively being built; and of the total, we consider that 36 per cent will be built and open to the public, 41 per cent might happen, and 23 per cent are unlikely to see the light of day.  All of these are just opinions……..

But oversupply is a temporary phenomenon.  Organic growth in demand tends to sort it out, especially as new investors are deterred from the market.  Further, more supply can actually create demand, due to the increased spend on marketing the destination by the hotels themselves,

and as the addition of new rooms can mean that larger events, such as conventions, can now be accommodated.

And as I mentioned, oversupply doesn’t have to mean lower prices.  Professional, internationally-experienced management who have seen it before will know that reducing prices is a hiding to nothing – in most markets doing so will not attract any more business, it will just result in guests resisting price rises when equilibrium returns.

Hotel investors need to carefully analyse any market, digging down into the detail of supply and demand, understanding the fundamentals of a dynamic industry.  The headline figures, those that I quoted above, are far from sufficient as the basis for an investment decision.  What type of hotel rooms are planned and under construction?  Is everyone building luxury hotels?  Then maybe there is the opportunity to develop at the midscale level?

In the hotel industry, it’s the opportunity that lies in the detail, not the devil!

Trevor Ward

W Hospitality Group, Lagos

trevor.ward@w-hospitalitygroup.com

 

There’s been a lot in the news recently about the new visa regime implemented by South Africa, and the negative impact on visitor numbers, acknowledged by both the Tourism Minister and the Ministry of Home Affairs.  “The government needs to ensure a balance between national security and growth in tourism” said the Tourism Minister according to one on-line report.

“National Security” is used frequently to defend what, in my opinion, is mostly an indefensible system.  I’m not talking specifically about the South African situation, enough has been written about that already.  I’m referring to the visa system in Africa generally, which absolutely, 100% has a damaging impact on tourism flows.

Yes, there are national security issues and yes, every country has the right to monitor and refuse entry to anyone, but that’s not what the visa system achieves, and often not what it is about.

Here in West Africa, the holder of a passport from an ECOWAS country can travel visa-free within the Community, and also to Chad and Cameroon.  However desirable or undesirable they might be.  Even simpler than having a passport, a national of one of those countries can apply for and easily obtain, an ECOWAS laissez-passer, an “internal passport”, just with a simple proof of nationality.

So a Nigerian national can travel without any hassle to Cameroon, but not to neighbouring Gabon.  Visas for Gabon are only issued in Abuja and, like the new South African system, you have to apply in person.  Why is that, now?

Senegal has just abolished visas for foreign visitors, in an effort to revive its tourism sector after the impact of the 2014 Ebola outbreak from which it suffered, not due to any direct effect from the virus, but because of proximity.

As a foreign national with residency in Nigeria, I have to apply for a visa for several countries in the ECOWAS region, some of which can be obtained by my PA in a matter of hours, others take several days and require me to travel to Abuja to present myself in person.  Why is that, now?

Nigeria and South Africa seem frequently to have arguments about this and that, and typically that translates into a problem for one country’s nationals to get a visa to go to the other – never admitted, but politically-motivated.  The reason sometimes given in these situations is that “we have run out of visa stickers”!  I was told that there are piles of South African passports in the Nigeria High Commission in Pretoria, “waiting” for a Nigerian visa.  Talk to hoteliers in Lagos, and they will tell you that they often get cancellations from South African guests at the last minute, because the visa hasn’t been issued in the timeframe promised, or at all.

It’s crazy.  It is not about national security.  Checks are rarely made about the individual making the visa application, to determine their desirability or risk of letting them visit.

So what is it about?

Bloody-mindedness, bureaucracy, money and politics.And ignorance.  Ignorance of the fact that international travel creates jobs, brings foreign exchange and investment, increases trade, and fosters good relations.

Money is often the main reason for requiring a visa, with the visa fees one of the main sources of revenue for the diplomatic posts issuing them – I remember the case of an African post in the UK actually giving false information about visas, stating that they could not be obtained on arrival, they had to be applied for and paid for in London – they needed the money!

I travel around Africa a lot (38 countries so far!), and in many countries, particularly in East and Southern Africa, I get a “visa” on arrival, by paying as requested.  I have no objection to that system, but what I do object to is that they call it a “visa” – it is not, it is an entry tax!

What’s so special about Senegal, that they can abolish visas altogether?  The answer is that they “get it”, that increasing visitor numbers is good for the economy, good for the people of the country, and good for the politicians.

The solution?  Well, here’s one.  Turkey, a country with as many security issues as any African nation, has increased its tourism from around 2.5 million visitors in 1985 to over 30 million today.  For some nationalities, they charge an entry tax, payable at the counter on arrival.  They say they will abolish that system soon, and for nearly all nationalities, you apply and pay on-line for an e-visa.  If you have a Schengen, UK or USA visa, it is automatically granted, on the basis that since those guys have already done the checks required, why should Turkey have any concerns?  It takes about 5 minutes to get through the application process, and download the visa.  Instant gratification, same as buying the air ticket, hotel and other components of the travel experience.  Works for me and my Nigerian family, every time!

Kenya has implemented an e-visa system, but you have to wait at least 2 days for a result – no sir, that’s too long, you’re not “getting it”!

Trevor Ward

W Hospitality Group, Lagos           

trevor.ward@w-hospitalitygroup.com

Is there an article to be had on the opportunities for local providers to hotels? Interior decorators, IT companies, furniture providers, etc.? Are they competing with international providers? Especially in regards to big chains?

Some 270 hotels with almost 50,000 rooms are in the hotel chains’ development pipelines, as reported in Ai [DATE].  Using an average of say US$200,000 per room to build, that’s US$10 billion of development cost, a significant figure by anyone’s standards!

The trouble is, a large proportion of that sum will be spent outside of Africa.  We call it “leakage” in tourism industry parlance, others call it a crying shame, a lost opportunity for Africa.  We laud hotels and other tourism establishments for creating jobs, more so in some countries than any other economic activity, but we are typically referring to the jobs in operations, not in the planning and development phase.

Countries like South Africa, Kenya, Egypt and the other “mature” economies are different.  They have, to a large extent, the professional skills (architects, engineers etc.), the contractors, the cement and the manufactured products with which to build.  And they can deliver the product quality that is demanded by the international hotel chains.  Most other countries, including Nigeria, with the largest development pipeline in Africa, cannot.

When developing a hotel at the highest level, say a Four Seasons or St Regis, the owner of the brand will demand that the owner’s professional team is pre-approved by them, often providing a shortlist of architects and others from which the owner must select.  This requirement is written in to the signed agreements, as is the brand’s approval of the contractor, and of the products selected.  Four Seasons go so far as to insist that they do all the procurement themselves!

Of course, if you want Four Seasons (Hilton, Sheraton, Marriott…..) to manage your hotel, then you must build them a Four Seasons (Hilton……).

Which is perfectly reasonable, any brand in any sector will demand that their specifications are strictly adhered to, whether it is building a hotel, making Coca Cola or producing clothing for Zara.

But whilst the majority of the workforce can be sourced locally, all too often the specialist inputs are just not there.  Why should they be?!  Why should a country like Ghana, which has built its

wealth since independence mainly on gold and cocoa, and which is experiencing a hotel development boom, have a highly specialised expertise in one sector, just because Four Seasons might come along one day?!

Well, two reasons, first to prevent leakage of millions of dollars of professional fees from their economy, and second to export that skill to other countries in Africa, even beyond.

As in all things, South Africa can be regarded as different, and the expertise for hotel development (and operations) has indeed evolved there, hence the involvement of South African architects, interior designers and others in hotel projects throughout the continent, mostly in the English-speaking countries.  But within the rest of Africa, we see very little “cross-border” involvement, so the architects on hotel projects tend to be from South Africa, the UK, the USA and China, instead of from Nigeria, Ghana or Cote d’Ivoire.

Speaking of China, the growing presence of Chinese contractors is very evident, not only because of their competitive pricing, but also because they bring highly attractive financing to projects.  But that comes with a cost, further leakage, in terms of the requirement that some 50 per cent of the labour is sourced from China, a morally-questionable demand given the need to create jobs for the rapidly-expanding African workforce.

The solution, in my experience, is professional partnerships, local firms partnering with foreign practices to the benefit of both.  The local firm brings its knowledge of the city where the hotel is to be built, including of local planning regulations and relationships with the planning officers.  In some jurisdictions, only a locally-registered practice can apply for planning permission, so in those cases it is compulsory for a foreign firm to work with a local practice.  And the local firm benefits from the transfer of knowledge, specific to the project as well as global best practice.  For the foreign firm, the local knowledge is essential (I have seen designs from foreign architects which are “unbuildable”, because they didn’t seek out the basic information about setbacks, plot density and other requirements), plus the local firm is a source of lower-cost inputs for draughting and the like – and they get a locally-based marketing department, keen to sell their services!

The lack of locally-manufactured products, from cement and steel to furniture and paint, is a more difficult issue to address, in order to reduce leakages.  I say “reduce” because it is impossible to source everything in one single country, when a deluxe hotel requires tens of thousands of different inputs.

Nigeria’s Dangote Group is tackling the cement supply, opening factories in several locations around Africa, the latest in Tanzania and Ethiopia.  Manufactured, finished products are more difficult, with a lack of electricity and unfavourable exchange rates two of the primary causes of higher prices for locally-sourced goods than for imported ones.  Grants are available for the cost of switching to cheaper, renewable sources of energy, and aid funding can sponsor the

development of partnerships between African and non-African firms for the transfer of knowledge to improve the quality of locally-manufactured goods.

None of this is going to solve the problems of sourcing inputs for the development of hotels today, tomorrow or in the near future – but they are (baby) steps in the right direction.

There’s another part to the solution, and that is changing attitudes, be it on the part of the owners, the hotel chains and of the guests themselves.

Is a guest in a hotel in Africa, let’s say in Lagos, so much impressed by the fact that the plate in the restaurant is from a well-known German manufacturer?  More impressed than if it was locally-made, or from South Africa?  Does the guest even care that much (“I’m not going back to eat there, they have African-made plates!”)?  I don’t think “going local” would be such a bad thing, and may even gain kudos for the hotel as guests understand more about the benefits of supporting the local economy.

I know, Nigeria’s manufacturing industry isn’t in any fit state to be producing hotel-quality tableware in large quantities, not yet, anyway.  But South Africa does, and Made in Africa is surely a good thing?

Each new hotel development, every refurbishment, brings so many opportunities for local, African suppliers, but with the exception of South Africa and a very few others, I think entrepreneurs are missing a trick, not gearing up to supply the industry with quality products.  As countries such as Nigeria and other mono-sectoral economies seek to diversify, it would be great if governments could encourage import-substitution businesses focusing on the quality end of the market.

Trevor Ward

W Hospitality Group, Lagos

trevor.ward@w-hospitalitygroup.com

 

Should you ever find yourself in Yenagoa, the capital of Bayelsa State in Nigeria, I can recommend a Chinese restaurant there which is well worth not going to. Should you have a craving for Chinese food (like I did), don’t go to the Sweet Tomatoes restaurant on Azikoro Road – go instead to a supermarket, buy a bottle of soy sauce, and take it to either the Creek Motel or the Mona Lisa Hotel, where you can enjoy the buffet.  Sprinkle the soy sauce on your food and hey presto!  It’s Chinese!

The wonderfully-named Sweet Tomatoes used to be the Royal Chinese Restaurant, run by Chinese people, who have left, the name was changed, and everything went to pot.  We expected as much when, after taking our order, the guy gets on the phone and we hear “you’ve got to get back here, we’ve got customers”.

Twice the staff confirmed that everything on the menu was available, but of course when I ordered the prawns, they had none.  So I ordered the fish, which looked suspiciously like shredded beef when it arrived.  The waiter was unable to confirm what it was, after all, he’s only the guy that carries the food from the counter to the table.

Did I tell you about the décor?  There wasn’t any, it was a black hole as far as ambience was concerned.

The manager (no, sorry, that’s far too official-sounding, let’s call him…….oh, I don’t know, the guy that……well, the guy that didn’t know what was available, didn’t listen when we ordered, and didn’t offer any drinks….what’s the word?  Nope, it’s gone).  So, this guy in a green tee shirt told me I had ordered the shredded beef.  To a chorus of “no he didn’t” from my ever-supportive companion, I asked green-tee-shirt-man which bit of the order “stir-fried fish with ginger and spring onions” sounded like “shredded beef”.  Take this away, I commanded, and bring me what I ordered.  Green-tee-shirt-man gets on the phone, and then comes up with the startling news that they had no fish.

When I asked for the bill he brought back the shredded beef, now stone cold.  Well “bill starts with a “B”, and beef starts with a “B”……

The beer was warm, the glass was cracked, - oh, what’s the point?  Just don’t go there, OK?  And don’t forget my TTT (Trevor’s Travellers’ Tip) about the soy sauce.

Happy Travels!  Trevor

I flew from Lagos to Malabo, the island capital of Equatorial Guinea, last week.

Malabo airport is a distinct improvement from the muddy concrete hut I remember from six years ago. All the same, it’s the first airport I have arrived at where the immigration officer gives you the finger. We’re off the plane, and I’m first in the queue for passport control. The guy at the desk waves a sheaf of blank arrival forms at me, and tells me to go and wait at the red line for someone to hand them out. May I have one of those?  No, go and wait. So I get the form, I fill it in, I go back to the desk, I hand him my passport, he fusses with it.

And then gives me the finger.

How jolly rude, I think. Que? (I say, in my best Spanish).  The finger again.  One what? I enquire politely, this time in English.  The finger for the third time, this time with a gesture to the little hole in the wall.  Aha, fingerprint time, both hands, and a photo.  Very wise, you never know what rascals are trying to get into your country these days. Five minutes later, he’s finished with me. I look pityingly at the queue behind me, and silently wish them a pleasant night queuing for the immigration man  to get through them all. Then there’s customs, or maybe security, who search you thoroughly (I long for the somewhat laxer methods applied in Lagos, where a languid moving of a shirt or two, whilst staring over your shoulder, seems to suffice).  Watch for the boy in the pink shirt who now latches on to you, asks if you have yellow fever (he means a vaccination certificate), which you then show to the two ladies guarding the exit door.  Malabo arrivals is a funnel system, so I am now at the narrowest part, at customs/medical check, at the exit door (a single door), with the other half of China (see arriving in Luanda for the whereabouts of the first half) trying to squeeze through, and several million Africans trying to get in.  Just push.

The next morning, I flew from Malabo to Bata, the country’s second city, located on the mainland.  And blow me, but what happens at the domestic arrivals in Bata?  The finger again, both of them, the photo, police searching my bag, very thoroughly, and customs too. Yes, customs, on a domestic flight.  That was a surprise, I tell you. I told the customs guy I had already been searched a couple of yards back (there was a screen in between, so I thought maybe he didn’t know, and I could save him a job?), but he says he’s customs, they were police. And then proceeds to search my bag with a spiteful, “I’ll get you” demeanour. Not for the first time, I wish I had kept my mouth shut, truly a passive indifference works much better.

Leaving Bata for Malabo wasn’t so bad, customs only searched the Chinese travellers, but fingers and photos? – I’m used to them now. Right hand, left hand, glasses off for the camera……Then they call you to board the bus for the aircraft, and outside the door they’re searching your bags again, doing the security scan with the wand. These guys are scared of something!

Travellers’ Tips – well, try to be first in line, unless you have hours to spare.  Keep your mouth shut unless absolutely necessary.  If asked, claim to be Welsh – a certain Mr Mann has given the English a bad name in this country (Google “Mann Equatorial Guinea” if you need to know more – but don’t print it and put it in your luggage). And just go with the flow, stay cool, even when they give you the finger.

In Malabo – the best hotel in town is the Sofitel, next to the Presidential Palace. I’ve not stayed there, but it looks nice.  The waterfront restaurant at the Hotel Bahia is pleasant, with English speaking waiters. In Bata – the Hotel Plaza is good enough, the Oriental Restaurant on the seafront has great Lebanese mezze, and there’s a great beachside restaurant outside of town, beyond the airport, run by a French lady. A lovely place for a lazy lunch.  I hear it is the place to go at weekends, with safe swimming, and there are a few chalets to stay in too.

Leaving Malabo – the finger again, of course.  Apart from that, nothing much to report – oh, except that you will need to show your Yellow Fever certificate again on the way out of the country. Don’t ask.  And don’t expect any duty free – I couldn’t see any! There’s a business lounge upstairs, no-one asked me whether I was in business class or not, so may be worth the chance, for a comfy chair. Except that I spent the whole time there worrying whether they would remember to call me for my flight. Maybe not worth THAT risk.

Happy Travels!

Trevor

You might think that travelling between Africa’s two largest oil producers, Nigeria and Angola, would be a piece of cake.  Not so.

Having obtained my visa to enter Angola, a Herculean task, I booked on the Arik flight.  Lagos to Luanda c3½ hours direct, the alternative being through Addis, Johannesburg or Dubai which, as anyone familiar with an atlas will know, aren’t terribly sensible routes, requiring a layover, and taking many, many hours longer.

I’m not Arik’s greatest fan, because over the years they have “stolen” countless hours of my life, due to delayed flights.  When a 6-hour delay on a 60-minute flight becomes the norm, you do begin to wonder why you bother.  But when there’s a direct flight of 3½ hours or a journey of 30 hours, you put your prejudices aside, and say “OK, whatever”, and book it.

I check-in online on the afternoon of the flight, get a boarding pass, travel to the airport, and learn that the flight had been cancelled the day before. “What the heck?!  Thanks a bunch!!”.  Sotwo days later it’s SAA through Johannesburg, a 14 hour journey, and we have to stop in Accra to take on fuel, as there’s none available in Lagos.

So to Luanda, where the differences between the two leading oil-producers are quite marked.  In Luanda, where they really can be quite paranoid about foreign visitors, passport control is a breeze, with only one person seeing the need to inspect our passport – in Lagos it is four officials, minimum.

But travel around Angola is much less easy than in Nigeria.  I went to Cabinda, an exclave, i.e. a piece of Angolan sovereign territory which is not attached to the majority of the country.  Five people checked my passport on the mainland, and another two when I arrived in Cabinda, for what was technically a domestic flight.  And I needed an official letter from my client’s company to make the trip!

Mercer rate Luanda as the most expensive city in the world for an expatriate to live, mostly due to the exorbitant rents for apartments and villas.  Not just living there, look at hotel expenses – I stayed at one of the leading hotels and paid US$400, with an average restaurant check of US$150 for two, and that’s only for the food!  Lagos has got much more expensive in the last few years, but it ain’t that high!  A corporate rate at a leading hotel in Lagos won’t be more than US$250 to US$280 – but at least in Luanda breakfast is included.

The streets in the centre of Luanda are as chaotic as in Lagos, mostly due to the lack of off-street parking, so the roads get clogged.  But you sense that the drivers are more patient than in Lagos.  And down in Luanda Sul, the city’s new and rapidly growing expansion area, there’s much less congestions, with new buildings providing the necessary parking.

There are not yet many hotels in Luanda Sul, the exception being the Hotel Talatona, next to the convention centre.  Some are planned, and I hear that Accor may soon enter the market there.  But in the CBD, there is a huge amount of activity.  The 400-room hotel in Miramar, known as the Intercontinental (but not the global brand) looks ready to open, and there’s the BikukuAlvalade hotel, not far from the airport, which also looks near completion, and the 370-room VIP Grand, in the ComandanteGika project, is now out of the ground.  The owners of the Continental hotel are building a new 180-room hotel in Maianga, also close to the airport, the ChikChik Hotel is under construction at the airport, and Radisson Blu have a project, not yet started, on the Ilha.

That’s a lot of new rooms!  I reckon the supply could more than double in the next 5 years, with most of the new hotels actually under construction, and some ready to open this year, so looking pretty likely.  And that’s into a market which has been badly affected by the drop in the oil price, with a direct correlation between the oil price and room occupancies.  The result has been a major reduction in government and oil company spending, which means fewer travellers needing accommodation, and a real scarcity of dollars in the system.

Back here in Lagos, we have also been impacted by the reduced oil price, but the situation is less extreme than in Luanda.  Occupancies are down, but as I wrote last month, the election result has brought new confidence, and there are signs of increasing travel.  And, most importantly, there is little or no new supply coming into the market in the foreseeable future, unlike Luanda which looks like it could be swamped with new rooms.  The George, a 62-room boutique hotel, opened this month, and the next to open looks like the 150-room Marriott, sometime in 2017 or 2018.

Unlike most markets, where increased supply means lower prices, the hotel industry doesn’t always “play by the rules”.  Lagos hotel prices haven’t gone down, in the face of a 300% increase in supply in the last 10 years.  But travellers to Luanda may well benefit from the increasing supply of rooms – whilst I was there, two of the leading hotels actually reduced their published room rates, without any change on the product or itspositioning, something I have never seen before.  So watch this space, Luanda may not always be “the most expensive city in the world”!

Trevor Ward

W Hospitality Group, Lagos           

trevor.ward@w-hospitalitygroup.com

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