Mrs. Ada Nwobu is the group general manager of Fahrenheit Hospitality Limited. In this interview with ANTHONY AWUNOR, the hotel management expert speaks on challenges of managing the business in Nigeria and how her company has brought innovations in the hospitality and tourism sector.
What is your assessment of hospitality and tourism industry in Nigeria?
The hospitality business is actually ubiquitous in the sense that we have a number of aspects that make up the hospitality as a whole. We have the, restaurant, bars, lounge, and of course, the hotels. When you talk about hotels, we are thinking of provisions of accommodation, food and beverage, parties, and halls. So, they vary and a number of things make up hospitality as a whole. If I should make my assertion about the industry, I should say that I would work with three main factors which include: size, structure and classification of the business. The way a 100-bedroom hotel would be run is different from the way a 30 or 20-bedroom hotel would run. We also have the classification; that is hotel category, where we have the 5 stars, 4 stars 3 stars and others. We also have the 2 diamond and all that. So they vary.
There are emphases on a shift to non-oil sector of the economy as part of diversification. Do you think tourism can fill that gap in terms of revenue generation?
Not exactly because the industry is not being well funded by the government to actually generate that kind of money. Hospitality and tourism go hand in hand. You cannot deal with one and leave the other. When we are thinking of guests coming into the country, the aspect of tourism is taken into cognizance. In that regard, we have people who would check them into the aircraft, board them and also disembark them. Then, they will be looking for hotels to check in. So you can see we work together. I wouldn’t say that the industry can fill that gap but I also believe that, if we are given all the necessary resources, and support from the government to expand the business and the industry, operators should be able to do much more.
Look at the European countries and the Arab countries, they are doing very well because they get the right supports from their governments. Even some African countries like South Africa, Kenya, Zanziber, Mauritius and Gambia are strong in hospitality. In Nigeria, there is a major vacuum to fill. If the government fills that vacuum, regarding funds, we would do better.
What about interest rates by Banks?
It is true that banks’ interest rates are high. Candidly, the interest charges are ripping us off. You are making money but you take all the money to invest back to the banks because the interest rates are too high. We are not getting any support from the banking sector. They actually loan us these money because they know they are getting double or triple of what they offered. So it is really tough.
But is it lucrative to some people?
It is lucrative but at the same time, I will advise those coming into hospitality business to be prepared because it is very demanding and a 24-hour kind of operation. One has to be ready. Again, one of the mistakes our local investors make is that they think that when you open a hotel today, they get back returns tomorrow. The ideal maturation period for an investor of any hotel to start seeing his or her money is one year. You cannot open a hotel today and start making gains tomorrow. You need to put some money aside for salaries, operations and maintenance.
How does the government policies affect your business?
Government policies affect us badly. Let’s take a look at the consumption tax for instance. We pay 5 per cent of the federal government’s Value Added Tax (VAT). We also pay another 5 per cent consumption tax for Lagos State government. There is another 10 per cent which we need to charge the guests for service fee; that is like 20 per cent added to a basic rate. We have situations whereby guests tell us that they are not happy about these bills and that it is outrageous. And another thing is that we also need to remit these bills back to the government. But we find a way also to improvise, to make it easy as service providers to our guests. What we do is that, in most cases, we factor in all the bills as one. So if I tell you that my plate of food is certain amount; I have added my service fee and all we do internally is to remit to the government.
Do you think the Nigeria Air Project would boost your sector?
It will impact positively to the industry because we are a developed country. I don’t consider Nigeria a developing country. We are already developed but we are not utilising our resources well enough. We should be one of the first African countries to have had a national carrier. I am happy to hear that it is being projected to commence in December. I hope it will actually become realistic. It is very important.
Which innovations has Fahrenheit Hospitality brought into the sector?
Fahrenheit Hospitality Limited is a hospitality company. We operate globally and locally. We work as operators to help investors, either on pre-opening, professional recruitment, training and business development. So it depends on the need of the property.
We run some properties while we also own some properties. That is what we do. The impact we have made in the society is the fact that we have helped to redefine boutique hotel services in Nigeria. We have our style, culture and policies. If you walk in here or check into our rooms for instance, you will realise that the way we operate is different from the way other hotels operate because it is a boutique hotel. There are things about boutique hotels; you have personalised services in a boutique hotel. For instance, if you check into my rooms, there is a welcome note from me to you, the guest. You don’t see that in most of the bigger brands. Ideally, you can’t have more than 60 to 80 bedrooms maximum in boutique hotels. They have few spacious rooms, a lot of aesthetics on the walls and it is cozy. Even the furniture, decorations are different. These are the areas we feel we have touched the industry as a whole. Anybody coming to a boutique hotel feels like he or she is going to be treated like a king or queen. So they get one on one attention from the hotel.
Security is paramount in hospitality and tourism industry. What are the effects of the current security situation to the sector?
Insecurity is a big concern. The issue of terrorism, herdsmen are great concerns. There are visitors who come into Nigeria, doubting if they are safe. I think the government needs to help us increase our security networks in the country right from the airport.
There has to be serious security measures. I have had a case where a guest was coming to check in and the person was kidnapped. Things like that give a lot of concerns. There are some hotels too, that are not keeping up with security standards. Things like this give concern. In our hotels, we put in a lot of security measures, right from the gate to the rooms. At the gate, you are searched and asked to open your boots. And before you check into a room, you identify yourself with an ID card. We have forms you fill and these are measures to ensure that both the guests in-house are safe and that the employees are safe too.