Cost of Building Hotel in Nigeria: Hotel Startup Cost.

As I mentioned in the previous post on how Hotel Business in Nigeria is Profitable,  you may want to believe that there is no money in hotel business in Nigeria. Well, there’s real money in hotel and hospitality industry and you can become part of it starting from today in this country.

For a small starter, your hotel really doesn’t have to be big, just something small in form of a mini lodge, beer parlor, and small restaurant.

Hotel business is one of most suitable and profitable business  in  Nigeria. This is because Nigerians are heavy spenders when it comes to merriment and good life and hotel business in one avenue through which you can tap from such heavy spending Nigerians.

Starting hotel business in Nigeria can be capital consuming, but the ending income will get you covered. To set up a successful  hotel business in Nigeria, here are the steps you must take:

• You need to conduct a feasibility study for you to better understand the business you are going into.
• You must come up with a great business plan. A good business plan helps to attract investors.
• Register the Business with CAC: It is a major requirement to obtain the certificate of incorporation which will be needed to obtain operation licenses for your hotel.
• Source for Capital: You need funds to build a hotel.
• Hire Competent Staffs
• Market Your Business: Take advantage of various effective marketing channels to get your hotel out there.

Hotel Business in Nigeria is one of the businesses that guarantees all season profit for the owner.  Any smart investor who venture into it will have REASONS to smile in no time.

Instead of asking if  hotel business in Nigeria is profitable, the question should be: What is the cost of building hostel in Nigeria, what is the cost of building a 20 room hotel in Nigeria or more or less and how to  get involved in the business now and starts sharing from the golden cake?

Cost of Building Hotel in Nigeria

First things to note in hotel business is to get a very good location in any of these commercial states: Abuja, Lagos, Cross Rivers, Ogun, Oyo, Kano, Jos, Ondo, Rivers State and so on.

The next step is to also get a land size that would comfortably accommodate the hotel, car park, outside bar, swimming pool if the need be and other things.

The cost of land very from State to State and also varies more on the location within the State. The average price of land for sale in Nigeria is ₦4,980,000 per plot. The most expensive land costs ₦130,000,000 per plot.

The cost of building hotel in Nigeria can be very high, medium or low depending on the style, furniture grades, sanitary wares grades, floor types, wall types and designs and so many other building effects that would be considered in building the hotel.

The average cost of building hotel in Nigeria is from ₦10,000,000 and above. To build a small hotel of 12 Nos of single rooms on a full plot of land in Nigeria will cost you noting less than  #10m (₦10,000,000).

In location like Abuja, Lagos or Rivers State, you can spend as much as ₦200,000,000, ₦300,000,000,  ₦500,000,000 and even a billion naira to have a good, beautiful and international standard hotel.

The cost of building hotel in Nigeria can be classified according to their sizes, number of rooms,  the locations, the quality of services they render, and beautification. Lest examine how much it cost you to build any hotel business in Nigeria.

1. Cost of Building 20 Rooms Hotel in Nigeria:

To build 20 rooms capacity hotel vary from one location to the other. The  cost to build a decently spaced 20 rooms hotel  in Nigeria is  ₦50,000,000 depending on the style, furniture grades, sanitary wares grades, floor types, wall types and designs and so many other building effects that would be considered in building the hotel.

2. Cost of Building 150 Rooms Hotel in Nigeria:

Types of Hotel Business and Setup Cost in Nigeria.

There are various classes of hotels business in Nigeria, each of class has their own quality of services they render.

The average cost to setup any of theses classes of  hotels  in Nigeria is range from ₦77,500,000 (77million naira) –  ₦4,940,000,000 (4billion naira). The list  below contain the types and setup cost of hotel business in Nigeria.

1. Airport Hotels:

One of the successful Hotel business man opined that, To setup a standard Airport Hotels business  in Nigeria will cost nothing less than ₦200,000,000 (200million naira) and above.

Airport Hotels typically cater for airport related business client, incoming tourist, airline passengers who has overnight travel schedules and cancelled flights.

It also target airline personals and airport services executives. One of the attractive features of these hotels is they usually either charge the guest on a daily basis or hourly.

2. Residential hotels:

Residential hotels is the types that provides short term, long term, and permanent accommodation the for Guest.

This types of hotels are ideal for expatriates and other companies employees on specials duties. The company enter into leasing agreement between one month to up to a year or more and subject to renewals.

To setup a beautiful  Residential hotels business  in Nigeria cost  ₦77,000,000 (77million naira) and above

3. Business Hotels:

These hotels are the most prominent of all the hotel categories and cater for all business traveler’s hotel needs, ranging from: facilities like access to business center, and personal computer.

Wi-Fi and fax machines are also provided to the guest. Business travelers hotels are usually located in a business districts or city downtown. Although Business hotels primarily serves business travelers, tour groups, individual tourists and conference groups find these hotels attractive too.

Guest amenities at the business hotels may include newspapers and magazines, morning coffee, and breakfast. Although some of these things are served by most hotels these days, business or not.

To setup a standard Business Hotels  in Nigeria will cost nothing less than ₦600,000,000 (600million naira) and above

4. Suite Hotels:

These kind of hotels are Exotic hotels and is the latest trend in hotels and hospitality industry. It has grown beyond bound and in direct competition with the resort hotels.

To setup a standard Suite Hotels business  in Nigeria will cost nothing less than ₦900,000,000 (900million naira) and above

Conclusion:

I started my journey of this research with how hotel business in Nigeria is Profitable, how to set up a successful  hotel business in Nigeria and steps you must take. For your hotel business to succeed, it requires a clear and consistent concept. It should align every single thing revolving around the business

This business tips is a  source of inspiration to getting inside the minds of travelers and hotel guests  in particular, what they really want from a hostel is key.

If you have stayed at hotels, you can ask what you were drawn to and what turned you off. What would you have liked to see as a hostel guest? Where did hostels impress you and let you down?

The internet provides an incredible range of resources to understand how hotel guests think. You can study hostel review websites, forums and online travel agency websites for guest feedback.

Looking at the reviews of  hotels that will be your competitors if you’re aiming to start hotel business can be especially insightful. Armed with information gleaned from studying such customer feedback, you can better create the best reservation to wow your guests and outperform your competition.

I conclude my research with the types and cost of building hotel in Nigeria. I elaborates how expensive it could be to setup this business in Nigeria, in spite of the huge capital required for setup, there’s so much profitability.

Cost analysis is necessary is necessary in every business startup, whatever your own situation maybe,  whether you are a joint investor, it is a family venture or you are flying solo, working out the cost of building hotel in Nigeria or set-up and required costs is essential.

The typical costs which includes: mortgage amortization, hotel design and architecture, Furniture: beds, wardrobes, lockers, towels, sheets, bookcases, TVs, First aid kits, fire extinguishers, Permits and licenses are all essential.

Tips to Start Hotel Business in Nigeria

• Do Feasibility Study

You need to conduct a feasibility study for you to better understand the business you are going into. This means you have to research on the location and size of the intended hotel you have in mind. Doing this helps in shaping the decisions you make at the end of the day.

Carrying out a feasibility study can be hectic, it’s why there are companies in place who can get it done on your behalf; we are one of them.

•  Business Plan

Now that you’ve done your research efficiently, coming up with a business plan will flow easily. A good business plan helps in attracting investors.

This is why you must have detailed and well-constructed strategies in place. Your business plan must sell, it must speak for the business. Additionally, a business plan helps you in running your hotel properly.

• Register the Business

The Corporate Affairs Commission of Nigeria is the body you have to go through to have your business registered.

It is a major requirement for obtaining the certificate of incorporation which will be needed to obtain operating licenses for your hotel.

There are also other organizations you have to go through to obtain certain licenses and permits. They include The Nigeria Hotel Association (NHA), Nigerian Tourism Development Corporation (NTDC), and the State Hotel Licensing Authority.

• Source for Capital

You need funds to build a hotel. Assuming you don’t have enough to fund this hotel business of yours, then you will have to apply for loans from banks, grantors, or angel investors.

However, these things don’t just happen, an excellent business plan must be in place to convince anyone to give you such loans or attract investments.

• Build Your Hotel

Ensure your hotel business is structured according to what it stands for. Every part of the building, from the outer layouts to what’s inside, should be well furnished and put together. Thus, it’s essential you hire competent architects and builders for your hotel building project.

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