> Hotel Industry Comparison Between Nigeria And Angola

Hotel Industry Comparison Between Nigeria And Angola

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

Affiliated to

Plot 10, Ayo Babatunde Crescent, off Oniru Market Road, Lekki Phase 1, Lagos, Nigeria
+234 (01) 295 6236
info@w-hospitalitygroup.com

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