Nigeria’s hospitality industry is projected to reach $2.61bn by 2029, driven by rising domestic tourism and increased investment, according to a 2025 Nigeria real estate report by Ubosi Eleh & Co.
It stated, “By 2029, the projected market revenue will be in the range of US $2.61bn, with the number of users in the hotel markets topping 18.78m. Simply put, the hospitality industry continues to have a positive and dynamic outlook for years to come.
“Recovering from the covid-induced slowdown, bookings have steadily improved, and with the rise in costs of living with the attendant inflation, room rates have actually gone up. We project another five to 10 per cent increase in room rates in the major hotels as the cost of running their facilities profitably increases.
“According to statista.com, the revenue of the hospitality industry in Nigeria will reach a staggering US $1.67bn by 2025 with an annual growth rate of 11.75 per cent between 2025 and 2029. There is now a full return to in-person conferences, seminars, and workshops, which remain veritable sources of income in diverse ways for the hospitality sector.
“The Lagos market has over 3300 hotels with estimated room availability at about 70,000 rooms. The international brand and brand-name hotels enjoy greater patronage in every way. The BON Hotels group, which has 10 operational BON hotels in Nigeria, intends to open another 22 hotels and residences in the next few years. Immediate locations include Kano, Ibadan, Warri, Asaba, and Port Harcourt.
“In examining the outlook for the hospitality industry, we have also noted the impact of short lets, like Airbnb, on the hospitality industry in major cities like Lagos, Ibadan, and Abuja. These cities are home to thousands of short lets with prices going as high as N600,000.00 per night in places like Ikoyi and Victoria Island in Lagos.”
The big challenge, though, is that the sector still remains very informal, unregulated, and driven primarily by word of mouth, referrals, personal experience, and online platforms.
There is very little accurate data on their numbers and operations.
According to the report, many structured residential estates are showing resistance to the use of homes within the estates as short lets because of the security implications and the noise nuisance created by the lessees for their short tenancies.
It added, “We continue to project a bright outlook for hotels; however, we firmly believe that many will enter the sale market for various reasons, primarily related to lack of profitability. These include the poorly located hotels and those with poor management and even poorer services from ill-trained staff or staff with zero training whatsoever. Nigeria still lacks a structured or formal training facility for hospitality staff, apart from courses offered in some institutions of higher learning and other short-term programmes that prospects can sign up for.
“Many of the schools with such specialised facilities closed down in the 1990s and 2000s, and so most hospitality concerns now have their own in-house training programs. We see opportunities in the training facilities sector for those who are inclined. The current level of inflation and cost of living will also make profitability difficult for many hotels and will cause quite a few to be put on the market for sale. There is a new diction in the Nigerian language, Detty December.
“This refers to the celebration over the December Christmas period and beyond that sees thousands of Nigerians in the diaspora and even non-Nigerians troop into the country for the end-of-year celebration. It has taken on a life of its own to the extent that virtually all the hotels in many of the big cities are fully booked. This Detty December phenomenon has equally driven the short-let market to the point that there is virtually nothing available between the months of November and January of the New Year. We have no doubt that it will only get bigger as the brand itself grows, offering years as opportunities along the value chain of activities that make the Detty December.”
