Do you wish to start a hotel business in Nigeria, but don’t know how? Worry no more, as you will get all the answers you seek today!
We will explain every step required in setting up a hotel in Nigeria right here in this article.
We’ve got years of experience helping hotels with pre-opening, Management, Restructuring and more
So, be rest assured every information you find here isn’t just theories but born out of expertise and experience.
In 2015, a report by Jovago.com listed Nigeria has having over 2218 hotels in major cities like Lagos, Abuja, Portharcourt, Ibadan and Calabar.
The hospitality industry is growing at a sporadic rate and a lot of new hotels are springing up daily.
Getting your hotel business up and thriving in this economic clime with the large number of competitors available will require you to deploy the use of some strategies.
These strategies will also keep you as the leader of the pack; this article aims to expose some of these strategies.
There are different things that contribute to the successful running of a hotel business, you have to consider facility maintenance and direct operations; servers, housekeepers, porters, kitchen workers, bartenders, management, marketing and human resources etc, to run a successful hotel business every part of the hotel must run and function efficiently.
Different Classes Of Hotel Business
When starting a hotel business, it’s important you decide the class of hotel you want to build. It’s different from hotel ratings.
These classification takes several criterion. We have classifications based on locations, sizes, by service standard, ownership and affiliation.
These classification takes into account target market.
While small hotels do not target elite customers, it’s ideal market is budget customers.
The same way large hotels target elite customers with both semi and full luxury amenities.
So, in building your hotel business, it must be based on the target market, and that is directly connected to your building budget as well.
Here is the general hotel business classification:
Generally, hotels are classified and built with this general classification in mind. Your dream hotel can fall into any of this hotel business class.
- Commercial Hotels
- Airport Hotels
- Suite Hotels
- Extended Stay Hotel
- Bed & Breakfast Hotel
- Residential Hotel
- Resort Hotel
- Casino Hotels
- Conference Hotels
- Convention Hotels
While Hotels that are classified on the basis of location includes:
- Airport Hotel
- Resort Hotel
- Country Hotel
- City Center Hotel, etc.
Another classification are those by sizes, which includes:
- Small Hotel
- Medium Hotel
- Large Hotel
- Major Hotel
But this class of hotels have two separate classifications based on U.K types and typical class.
The U.K. Class is also what often obtain here in Nigeria.
So, you can classify Nigerian hotels based on the U.K class and you will be right. But that’s not to mean that some Nigerian hotels are not in the typical class.
It’s just that Nigeria doesn’t have a standard class rating of its own.
For you to successfully set up a hotel business in Nigeria, here are the steps you must take:
Carry out a Feasibility Study
You need to conduct a feasibility study for you to better understand the business you are going into.
This means you have to research on the location and size of the intended hotel you have in mind.
Doing this helps in shaping the decisions you make at the end of the day.
You also get to have the right business plan, since virtually everything, including needed funds, facilities, name and scope of business will be factored in.
Put simply, a feasibility study allows you to determine if the business will be beneficial or not.
Carrying out a feasibility study can be hectic, it’s why there are companies in place who can get it done on your behalf; we are one of them.
Have a Business Plan
Now that you’ve done your research efficiently, coming up with a business plan will flow easily. A good business plan helps in attracting investors.
This is why you must have detailed and well-constructed strategies in place.
Your business plan must sell, it must speak for the business. Additionally, a business plan helps you in running your hotel properly.
Register the Business
The Corporate Affairs Commission of Nigeria is the body you have to go through to have your business registered.
It is a major requirement for obtaining the certificate of incorporation which will be needed to obtain operating licenses for your hotel.
There are also other organizations you have to go through to obtain certain licenses and permits.
They include The Nigeria Hotel Association (NHA), Nigerian Tourism Development Corporation (NTDC), and the State Hotel Licensing Authority.
Source for Capital
You need funds to build a hotel. Assuming you don’t have enough to fund this hotel business of yours, then you will have to apply for loans from banks, grantors, or angel investors.
However, these things don’t just happen, an excellent business plan must be in place to convince anyone to give you such loans or attract investments.
Build Your Hotel
Ensure your hotel business is structured according to what it stands for. Every part of the building, from the outer layouts to what’s inside, should be well furnished and put together.
Thus, it’s essential you hire competent architects and builders for your hotel building project.
Note however that building goes beyond the physical structure. It also includes having a hotel management software and staff uniform.
While hotel management software will help in ensuring seamless operations, uniforms contribute greatly to branding.
Hire Competent Staffs
This is very integral if you wish to have a successful hotel business.
Having the right staff contributes to productivity.
Each staff member efficiently doing their jobs is what determines the outcome of the business.
Thanks to the hospitality recruitment agency like “Anywork Naija”, you won’t have to go through the hassle of recruitment.
Apart from recruiting, you can go further to get your staff trained. This can be effectively and efficiently handled by Jones Hospitality.
Design, Build And Furnish Your Hotel
Use only the best company to plan, design, build and furnish your hotel. A hotel is more than a fine building. So much goes into the building of a hotel.
Firstly, the class of hotel business is a major criteria when designing a hotel.
A builder who doesn’t understand the different class of hotels won’t get it right.
And when you understand the class of hotel to build, it helps you come up with a feasible budget and save you cost from adding amenities that doesn’t belong with that classification.
Also, hotel furnishing is an important aspect of hospitality.
You want customers to satisfy their fantasy which includes luxury beyond what they have and experience at home.
Whether you want to build a 1-star or 5-star hotel, you need an experienced company to build your hotel.
Offer Satisfactory Services
Whatever your offer let it be satisfactory to your target customers. One of the key benefits of knowing your customers is to be able to provide them with the best services that exceeds their expectations.
That way, even your staff are trained to know what your customers want and how to satisfy them.
Sometimes, it could means being courteous, capable of resolving issues that arise promptly or even as simple as remembering the names and preferences of repeat guests and giving advice about what’s new and better for them.
Implement a Smart E-commerce Strategy
Most hotel rooms are sold online than through walk-in customers. A good hotel should be able to sell at least 60 percent of its room via online hotel booking portals.
Apart from hosting your own booking portals, you should also list your hotels with every popular hotel marketplace online.
You should take advantage of social media platforms to promote offers and sell more hotel rooms.
Your marketing strategy should be such that encourages the sales of more rooms.
Even if it includes using price point to lure online customers.
Structure a Smart Hotel Pricing Strategy
Sometimes, a little bit higher than normal price could bring you more customers than an average price or cheaper deals.
Be smart and learn smart hotel pricing strategy. It will help you increase number of rooms you give per day.
However, you should learn to determine room rate based on your cost and market research. You may have relatively high cost than a competing hotel.
Selling lower than them may be costing you good revenue.
Price factors should include the following:
- Cost of Staffing
- Room category and amenities
- Average Time and length of stay
- Cost of Maintenance
- And your Competitors pricing
Make Flexible Decisions
Hotel customers are the most difficult set of customers to deal with.
And that’s because they are rich or are willing to spend more for luxury and comfort. That means they are also loud and braggadocios.
They want everything, even beyond what they can afford.
Sometimes you need to make decisions that is not in the hotel manual, your hotel management needs to be flexible enough to decide on every issue to improve customer satisfactory report.
Also, you should know that a single bad customer review online can destroy your hotel business than a thousand good reviews can do.
So, paying close attention to what customers may say about you should help you decide faster on every customer request.
Differentiate And Target Repeat Customers
Customers would remember their experience more than the ambience of your hotel.
Offer them better experience to help them choose your hotel against the competitors.
Rather than try to do too many things, focus on significant areas of hospitality and do it much better than hotels around you.
Also, you should create the kind of products that other hotels don’t have.
That way you win a significant numbers of repeat customers who would come to your hotel because you offer what’s not available elsewhere.
Focus on Quality Management
Providing quality services at any hotel is not just about the value customers derive from the products. Most times it’s often the way the values are being presented.
Having an inspired workforce is better than building the best looking hotel in town.
If your workforce is happy working in your hotel they would in turn express it in the way they serve those who come to the hotel.
Primary because they want to continue to work here and not because they are afraid to be sacked.
Focus on employees’ satisfaction as much as you want customers satisfied by the employees. Factor a good pay and free times for workers into your management style.
Don’t treat workers as slaves, because they will express slave mentality in their service delivery.
Plan For Strategic Marketing
Don’t be the kind of hotel people would discover by chance. Be popular in your market.
That’s the way to grow hotel business. If people don’t know your hotel exist, they wouldn’t recommend you to anyone.
Create marketing that encourages more new customers. The more customers you make, the better your long time success strategy. Also, discover programs and events that bring more people to your city and tap into them.
It might be churches, government or organizations. Partner with them and create special price package to lure them to use your hotel for their events.
Do everything to be the hotel of choice by most event organizers in your city
Hotel business is location base. The first thing you must get right is your location, using your hotel classification and target customers as a yardstick to determine where to locate your hotel business.
And getting your hotel location right should not be a guess job.
Neither does it require a magic wand.
What you need is a professionally done feasibility study to determine the possible profitability of your hotel business in your chosen location.
And if the right location meets the target customers with the right hotel classification building, your hotel business will be an instance success.
Note the three key points: location, target customer base and the right hotel classification building.
These three things would require the best hotel consulting experts to handle it for you.
Don’t throw away your hard-earned money in ignorance and ‘over-sabi’ mentality.