2023 Lagos Development Pipeline Report Hospitality Overview: How does the business sector drive the hospitality industry?

In the recently released Estate Intel 2023 Lagos Development Pipeline Report, we analyzed the performance of retail, hospitality, residential, healthcare, and office sectors. Here’s what’s in store for the Lagos hospitality market in 2023.

 

The hospitality sector remains one of the most resilient sectors in Lagos. Data from W Hospitality Group indicates that average occupancy rates peaked at 68.4% in 2022, a ten year high, from 2012. In addition, RevPAR recorded in Lagos increased by 43% in 2022 compared to the base year of 2019, effectively ranking Lagos ahead of major international hubs such as Dubai, London, New York and Hong Kong.

This performance has been attributed to pent up demand especially from the business sector as well as domestic tourists against the backdrop of a recovery post pandemic with businesses contributing up to 77% of Lagos hotel demand according to a survey by W Hospitality Group. This momentum is set to continue in 2023 despite speculations of an oversupply, with the development pipeline accounting for approximately 36% of total stock. Notably, only 20% of the development Pipeline is under active construction.

 

Trevor Ward from W Hospitality Group notes that, “….For 20+ years people have been forecasting over-supply in Lagos, it has never happened, nor do I believe it will, at least not in the short to medium term. The headwinds for new hotel development are severe right now, and it’s anyone’s guess as to when they will ease off.

So, investment in new build is being delayed, but there are opportunities in acquisition of existing hotels (Kasada recently closed the acquisition of the former Southern Sun Ikoyi, now rebranded Mövenpick), and potentially there should be scope to pick up uncompleted projects at a discount…”.

 

Download the 2023 Lagos Development Pipeline report for a comprehensive breakdown of Lagos’ hospitality development pipeline.

 

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