Saturday, January 24, 2015

7 Profitable Business Opportunities in the Nigerian Hospitality and Tourism Sector

The Nigerian hospitality industry is worth over $6 billion according to the Africa Development bank and Nigeria also has Africa’s fastest growing middle class (an average increase of 7% per annum) population in Africa with a very large market. Travel activities in Nigeria account for a huge volume of commercial activities especially trade as most of the countries imported goods arrive in Lagos from the ports while traders go the ever busy wholesale Balogun/Idumota market to buy goods for resale to other parts of the country. On the other hand according to a report monitored on Business day Nigerians spent over N161 billion renting halls and venues for events in 2013 making the hospitality industry very huge with unending opportunities. I’ll briefly describe the few business opportunities and mention potential startup capital required for one to invest in them.

Lucrative Hospitality Business Opportunities in Nigeria
Let’s analyze a few together;  

Hall Rentals: The market is worth over N160 billion per year with all manner of events from social to corporate requiring suitable venues for use. In Lagos for instance at least 800 wedding receptions happen every Saturday not including child naming ceremonies, kiddies’ theme parties, conferences, seminars, concerts and even church services. The list goes on and you could actually start this business with as little as N5 million renting out space for people to use.

Recreational Parks: These are closely related to event venues/halls in terms of making available space for rent especially birthday parties and small get together but they have other services such as restaurant and bar, suya/shawarma spot and even game centers mostly a place of relaxation for workers who would troop in after work to while away time for traffic to subside before heading home. Peak periods would be in the evenings after work on weekdays and Saturday afternoons/evenings. Startup Capital is roughly N12 million

Amusement Parks: There are only 3 fully functional amusement parks in Lagos to serve an estimated 9.8 million children and they aren’t world class. Middle class Parents value and cherish their kids happiness and wouldn’t mind paying good money for fun outdoor quality time that would impact on their kids mental and social development.

Low budget boutique Hotels and Guest Houses
There may be numerous hotels in Lagos but most of them don’t target high flying but price sensitive travellers to the city. It would appear as if they want to reach either tourists/local visitors or provide temporary accommodation with caring out customer experience. Boutique hotels offer world class services but at very affordable rates and presently there are no hotels like that in Nigeria. The 5 star hotels we have are very expensive whereas the low budget hotels are nothing to write home about. Capital outlay for this business is roughly: N250 million for a 20 room standard hotel.

Travel and Tour Services
Nigerians are among the most travelled Africans and constitute a sizable population of the continent’s business travel industry. Locally that number runs into 20,000+ daily airborne passengers and about 9,000+ international bound passengers. The market is worth over N800 million per day in revenue. Capital outlay could be as low as N500,000 if you want to operate as an IATA licensed operator.

Car Hire Services
For many Nigerians coming from overseas or other visitors, this service is very essential. They can’t do without it because it’s relatively more convenient although more expensive than regular taxi but is a major choice for them. Visitors to major cities in Nigeria also like airport shuttle service even while using local flights so there are opportunities here as well but the market is very competitive.

Inter-state Transport Services
They offer an alternative to local flights but are more risky and time consuming. The business is also highly volatile as there are periods of huge profit and also periods of huge sustained losses. Yesterday’s profits can be easily wiped out by today’s losses but it’s still overall a lucrative business but only if you can target lucrative routes and provide affordable high class services that the competition within that route will struggle to keep up with. 
Do you want a complete and professionally written business plan on any of the above listed opportunities? I’m available to write you one for a token simply call 0803 206 4106