Nigeria’s hospitality sector is poised to deliver over 3,700 new hotel rooms between 2026 and 2029, signalling renewed growth and investment in the industry.
This is according to a report by Estate Intel, which further stated that an uncertain business environment has limited the delivery of new stock into the market and pushed completion dates out.
It stated, “There are signs of growth in the hospitality sector as well, as over 3,700 keys are slated for delivery between 2026 and 2029. An uncertain business environment in recent years, however, has limited the delivery of new stock into the market and pushed completion dates out. We anticipate a more bullish environment for hotels as the economy recovers.”
The report further noted that in response to Nigeria’s transition to economic recovery, development starts and pipeline activity across multiple property sectors are growing at a notably faster pace.
“For instance, the data centre sector stands out as the fastest-growing asset class, with a development pipeline that is 186.37 per cent of the estimated total stock, as supply pushes towards 218 MW+ by 2030. The residential sector paints a similarly positive picture, though the supply response is nuanced. Despite a pipeline of approximately 34,800 units, an estimated market gap of over 2.7 million units still exists. While this supply gap creates opportunities for developers, particularly in the middle-income and deluxe-grade categories, developers are increasingly opting to enter the luxury space, where profit margins are more resistant to economic shocks.
During the year, residential rents rose as owners of middle-income and deluxe-grade properties continued to adjust pricing upwards to counter the effects of the devaluation. While it has led to some tenant churn, the supply gap ensures these properties are immediately occupied at new rental levels, keeping net absorption high. Finally, even with rising building occupancies and slightly greater absorption in the office segment, the market remains tenant-led. In parallel, office development starts, and active construction is also owner-occupier-led and less driven by speculative players.”
Trickling down to Lagos State, the report noted that Lagos’ hospitality sector is driven by business and corporate activity, supported by proximity to international airport infrastructure. Enhanced location accessibility across key commercial districts reinforces the market’s attractiveness to domestic and international visitors.
“Lagos hotel occupancy rates as of October 2025 were 66.7 per cent, according to STR. Overall, we anticipate occupancy rates in the late 60 per cent and early 70 per cent in the years ahead. Concurrently, large supply additions in the short-let market have created heightened competition among short-let operators and standard hotel rooms. Anecdotal evidence this December points to relatively weaker occupancy in some short lets, but others are reporting business as usual.
Data from Estate Intel shows that over 33 per cent of the total pipeline has been put on hold, indicating a lag between the pipeline and active construction among hotel operators. This may be a result of macroeconomic conditions and high construction costs. The outlook for the Lagos hospitality market is currently positive, as limited high-quality completions over the next few years will keep the market balanced.”
