Africa Hotel Insight Owerri

“Covid 19- Imo State Hotels Lose 7 Bilion Naira: Possible Recovery Steps”

Asides the government, the hotel industry in Imo state is about the biggest employer of labour, employing mostly young people, keeping them out of poverty and helping to reduce the crime rate in the state. The hotels also contribute immensely to the state IGR and of course the FIRS.

The emergence of Covid 19 has totally reversed the fortunes of Imo State Hospitality growth. Revenues have dipped by almost 90% given the interstate lockdown and the domestic flight bans. Hotels in the pipeline had slowed thereby affecting the expected increase in number of rooms. Employees have been laid off without pay. Expected Receipts from the sector as taxes to government have been cut -patronage is very low, Restaurants Shut, Bars & Lounges Closed. Fear is Everywhere.

POPULATION OF HOTELS IN IMO STATE.
The total figure of hotels in the state is yet to be officially ascertained. The Hoteliers Association (a body of hotel owners) in Imo State has 143 hotels officially registered with them. However, figures from independent data gathered by Sustainable Eco6tem, a hospitality consultancy firm suggests there are over 600 hotels in Imo State with about 400 in the Owerri Senatorial Zone axis. Also figures from the Imo State Internal Revenue Service suggests there are about 600 hotels in the State.

ESTIMATED CONTRIBUTION TO EMPLOYMENT IN IMO STATE

With an estimated 400 hotels( there are more hotels) in Imo State and an employee average of 30 persons/hotel will give you 12, 000 direct employees for the hotel sector. Being a service industry, vendors supply most of the items used in the hotel and this is massive- beddings, food stuffs, beverages, room amenities, branded items, laundry chemicals, car wash services, etc, are all provided by vendors. Collectively, Imo state should boast of over 30, 000 direct and indirect employees in its hotel sector. This should be more.

ESTIMATED ECONOMIC CONTRIBUTION OF HOTELS IN IMO STATE BEFORE COVID 19.

With an estimated 400 hotels in Imo State and an average of 40 rooms each (these figures are definitely higher), Imo State has the capacity of selling 16, 000 rooms daily. Before Covid 19 lockdown, assuming all these rooms were sold at 10, 000 Naira flat rate (without categorizing the rooms) at 60% occupancy, then the hotels under these assumption will be selling 9, 600 rooms x 10, 000 = 96, 000, 000 daily- and 2, 400, 000, 000 monthly cash flow.

LOCAL SCENARIO/ASSUMPTIONS

Estimated Revenue by Imo State Hotels between April- June 2020
Figures From IIRS Shows About 600+ Hotels In Imo State.
Imo Hoteliers Association Show That 143 Hotels Are Registered With Them.

Assuming Only 400 Hotels in Imo State with Av. 40 Rooms = 16, 000 Available Rooms
Average Daily Rate (ADR) can then be estimated to be 16, 000 Rooms (Using 60% occupancy) =9, 600 Room Nights @ N10,000 Flat Rate= 96, 000, 000/Day (96 Million).
ADR for 25 Days = N2, 400, 000, 000 x 3 months = N7, 200, 000 000

NOTE- These Assumption Does Not Include Other Revenues From Food & Beverage, Laundry, Recreation Areas, Pastry, etc.

ESTIMATED/ASSUMED LOSS
Estimated Loss of Revenue From Rooms Alone By Hotels In Imo State Between April- June 2020= N7, 200, 000 000

ESTIMATED/ASSUMED LOSS TO FIRS FROM HOTEL ROOM REVENUE IN IMO STATE
7.5% 0F 7.2 BILLION = N540, 000 000.

ESTIMATED LOSS FROM HOTEL ROOM REVENUE TO IMO STATE GOVT
Imo ENTRACO Sanitation Fees
Imo Infrastructural Devpt. Levy-
Imo State Tourism Board- (Reg/Renewal)
Min of Comm. & Ind. Reg/Renewal Fees For Business Premises
Min. of Info and Strategy-Signage/Advert
Others (Environmental, Effluent Discharge, Radio/TV, etc)
Taxes From Employees
Taxes From Vendors/Suppliers
Taxes From Transport Operators (Airport Taxi, etc)
Job Losses
Possible Increase in Crime

MOVING FORWARD- POST COVID 19 & THE NEW NORMAL FOR HOTELS IN IMO STATE

There is no doubt that Guests/Travelers will seek safety, increased hygiene, sanitation and personal space in the new post Covid 19 hospitality. The question is how can we maximize the new normal to the best benefit of Imo State Hospitality so we can protect our staff, and guests, secure our business growth as well as continue to contribute via taxes to the efforts of government in the development of the state.

It is important to mention that for a state like Imo that has more hotels and fewer industries, it will be a huge mistake not to use this opportunity to transform the sector, build confidence among travelers, sustain the much needed employments and increase revenue.

KEY POST COVID 19 STEPS TO TRANSFROM THE SECTOR

1. APPRECIATE THERE IS A CHALLENGE

Owners, managers and regulators must understand there is a challenge. We are in a difficult and complex situation that would require change in strategy, team work, and understanding by regulators as well as professionalism in delivery. So much is at stake and we can’t afford to lose so many years of commitment to an industry like this in Imo State.

2. UNDERSTAND THE NEW TRAVELLER’S MINDSET

The truth is that the ‘traveler’ has changed. The customer you used to know is no longer the same person- he is now more cautious, detailed, safety conscious and laced with elements of fear. The Hoteliers must figure out the mindset of the traveler, and only then can you effectively service him and make the maximum revenue as expected. Obviously, the travelers will be fewer than we the pre-covid 19 era and that makes it more difficult for enough guests to go round in the next 12 months- hence building a portfolio on likely ‘traveler’s mindset’ will in many ways increase your chances of retaining guests.

3. HEALTH, HYGIENE & SAFETY PROTOCOLS
Mere cleaning would no longer be accepted by guests. The current situation requires extended, deep and detailed cleaning with the right kind of chemicals in adequate measures. Before now, most hotel cleaners’ use only detergent to clean hotel rooms, laundry and others, no focus was placed on surfaces. Stair rails can stay for days without cleaning and when that is done, wet duster is used. Today, surfaces have become the most dangerous places in the hotels so hotels must establish protocols on surface cleaning, including Lifts, Stair Case (Rails/Walls), Restaurants, Reception, door handles, etc.

4. GOVERNMENT MUST RETHINK TAX STRATEGIES
The state government must look at its consolidated tax as regards to hotels and restaurants. They must also revisit the issue of double taxation, local government revenue drive, rogue tax collectors, etc. This is not the time to mandate revenue collectors to burst and seal hotels. It’s time to engage hotel owners and arrive at a convenient position.

5. REGULATION/COMPLIANCE
What is regulation without compliance. Issuing guidelines without proper enforcement, supervision and compliance is waste of leadership opportunity. In this Covid era, government must ensure compliance to safety and hygiene protocols are complied with. Infact, compliance to hygiene protocols should be top priority and should come before taxation. Safety first.

6. CREATIVE/PROFESSIONAL SERVICE
The question that must be at the back of your mind is- What must I do to offer the best of guest satisfaction? As a CEO, or manager, you definitely won’t have all the ideas, so you would need good heads to have a mix of options in a limited world. Before now, most hotels around do not employ professional hands. They do not also train those they employ. That worked then as anything was acceptable, especially in an environment with so many choices. In these times, we must ensure we employ the best and train them to be the better with focus on creative service delivery. It will only take the right team to ensure the following happens:

7. REDUCE/UPSCALE YOUR SERVICES
Be Creative with new ideas to enhance revenue- Foodie Option, Laundry Services, Themed Nights of 10 or Less with Social Distancing In Place and advanced booking in place.

8. COMMUNICATE/ BUILD CONFIDENCE
Hotels In Imo State must begin to employ appropriate communication strategies to inform guests old and new of the positive developments in their property. Don’t expect travelers to think you are doing the right thing. Assume they don’t trust you, so you do the much you can to build confidence that attracts sustainable patronage. Part of your communication should be to inform travelers of new protocols in line with NCDC and State Guidelines that are in place (from the front of the house to the back of the house) to guarantee guest safety. Guests would love to hear if your hotel has a ‘Covid 19 Task Force/Team’ professionally managed and specifically mandated to follow through all guideline.

Also, information on staff grooming, hygiene, and hotel plans if a guest or employee is sick or suspected to be positive’ Also, you must communicate new technologies deployed to increase service efficiency, reduce contacts and ensure beautiful experiences as well.

9. SOCIAL MEDIA APPROACH

To achieve this, your hotel would need a website and other social media handles that are active as well as a good communication strategy. Unfortunately, very few hotels in Imo have active websites.

10. LOCAL TOURISM DEVELOPMENT (Travel Within Imo)
Please note that traveling local will become a new norm in the coming months. Even after the lockdowns people will continue to be afraid, a lot of travels will be shelved and canceled so this is a great opportunity for operators, and for government to encourage local travel. Travel Within Imo can increase interest in the state and that means more visitors to the state and more revenue.

Imo State Government must ensure they invest in domestic tourism so that visitors from within the country can travel down to Imo, since they are not able to travel abroad due to restrictions and expected increase in cost of travel. The Nekede Zoo, the Lagwa and Imerinwe Monkey Trails, Oguta and Abadaba Lakes should receive immediate and expert attention – not the political brouhaha.

11. DEPLOY A CREATIVE MICE STRATEGY
Transforming Imo Hospitality in a Post Covid 19 scenario will mean deploying a world-class MICE Strategy. This will be of huge benefit to hotels, events centers and restaurants as well. Before now, Imo used to host reasonable no of Meetings, Incentives, Conferences, and Events (MICE). With Covid 19 that will be difficult, however with a well articulated design, supported by stakeholders in government – with focus on excellence, safety and hygiene, Imo can become the next Kigali of Africa known for hosting international conferences and events. All we need is to build confidence, and reputation as a safe, clean and excellent MICE State.

12. STANDARDIZATION/CLASSIFICATION
Lack of standardization and classification is the foundation for failure, poor services, untrained manpower. It is the reason for the proliferation of hotels without defined standards. Regulators must begin the process of classification and standardising hotels.

13. HOSPITALITY FUND
Unfortunately most hotels won’t reopen after the Covid 19 because of economic challenges compounded by arrival of fewer guests. Government should create a Special Intervention fund for hotels in Imo state to help them cushion the effect of the pandemic. This can be a form of loan with at least 1 year moratorium and repayable over 5-10 years.

Chibuikem Diala, is the CEO of Sustainable Eco6tem, and the Executive Director, International Hospitality, Tourism & Eco-Sustainability Forum (IHTEF). He is a Hospitality Consultant With New Design Thinking Mindset For The Hospitality Industry.

By

Chibuikem Diala, MIH

Reach out on- ihtefafrica@gmail.com

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