COST OF BUILDING A HOTEL IN NIGERIA
A hotel is a business establishment that provides lodging to travelers and sometimes permanent residents and restaurants, conference rooms, shopping, and other public amenities. The Merriam-Webster dictionary also defines it as an establishment that provides lodging and usually meals, entertainment, and various personal services for the public
Nigeria’s hotel business is particularly profitable due to the country’s high spending habits. Running your hotel is a terrific opportunity to profit from Nigerian culture, which is full of energy, excitement, and delight. You can earn N900,000 each month if you serve good enough quality.
Many business-minded individuals in Nigeria consider the travel and hotel businesses to be solid investments. As the travel industry continues to grow, building a hotel has proven to be a good financial venture. Hotels come in many shapes and sizes, from basic motels and inns to 5-star luxury mega-hotels.
As a result, the expenses connected with this type of project are extremely diverse. There is no ‘one for all’ cost of building a hotel, they vary sparingly due to the design of the hotel, proposed location, and preference of the investor.
Generally, there are about 21 different types of hotels, a limited number of ten (10) will be highlighted before getting back to the crux of this article.
- CHAIN HOTELS
Chain hotels are a collection of hotels run by the same firm or owner.
Motels began to spring up to serve visitors as an economical and convenient place to stay overnight on long journeys. They’re usually found near highways and major roadways, with few if any facilities.
A resort is a destination that tries to provide guests with everything they need in one place, including lodging, dining, drinking, shopping, and entertainment. Some resorts are all-inclusive, allowing guests to pay one price for limitless service. They are frequently found in popular vacation areas.
A typical inn is substantially smaller than a chain hotel. Frequently owned by individuals or families, provide a warm, welcoming atmosphere for their visitors. Inns usually have fewer in-room amenities than major hotel chains, however, they may have in-room coffee, Wi-Fi, or limited breakfast selections.
Typically, all-suite properties provide each guest with a bedroom, separate sitting area, and a kitchenette or cooking utensils. Many prominent hotel chains have one or more all-suites brands under their roof.
- CONFERENCE/ CONVENTION CENTER HOTELS
Conference/ convention center hotels are distinguished by the combination of guest rooms and meeting space they provide. These locations are built to handle huge events and offer a number of event alternatives to meet various configurations, entertainment options, A/V equipment, and breakout requirements.
- EXTENDED STAY HOTELS
While many lodging options cater to short-term or overnight stays, certain properties specialize in accommodating travelers who require a longer stay. An extended stay hotel is a type of hotel that caters to business travelers and those who are staying in one location for several days, weeks, or months.
- BOUTIQUE HOTELS
The average boutique hotel is substantially smaller than the average chain hotel. You can expect to find boutique hotels in fascinating places or near popular sites, such as an urban city center or shopping districts, with 100 guest rooms or less.
- CASINO HOTELS
Casino hotels are really located within casinos! They usually provide guests with overnight accommodations, access to an on-site casino, and a range of restaurants, bars, entertainment, and shopping options.
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- TRANSIT HOTELS
Travelers with a flight to catch will appreciate transit hotels, often known as airport hotels. Inside an airport, transit hotels are usually next to a terminal and near a security checkpoint. Passengers who have long flights or foreign flights can check-in and rest at transit hotels in between flights or during extended layovers.
Out of the above-listed types of hotels, Nigeria is characterized by 80%, if not 99%, this goes to show the commendable interest of Nigerians in luxury and relaxation.
Now, the average cost of constructing a hotel in Nigeria is roughly $10,000,000. A small hotel with 12 rooms on a whole plot of land in Nigeria will cost you less than $10,000,000 (4,150,000,000 Naira). As mentioned earlier, the cost of building hotels in Nigeria vary; we would divide the pricing into four aspects:
- National average cost = $22,100,000 (9,202,440,000 Naira)
- Average range = $13,000,000 – $32,000,000 (5,413,200,000 – 13,324,800,000 Naira)
- Minimum cost = $7,500,000( 3,123,000,000 Naira)
- Maximum cost = $60,000,000 (24,984,000,000 Naira)
Hotel owners who have the right combination of location, price point, physical asset quality, marketing strategy, dedicated employees, and supportive investors can make a lot of money. As a result, a hotel isn’t profitable by default, so you’ll have to work extra hard to turn a profit. It is not enough to have the intention to build such an enterprise as a hotel when all the plans and designs are laid out, it is important to inform the right authorities, informing the right authorities, in this case, means registering the company and attaining a license to operate.
Therefore, if you own or operate a hotel, you must register with both the Corporate Affairs Commission (CAC) and the Nigerian Tourism Development Commission (NTDC). If you register with the NTDC, having your hotel mentioned in the official tourism guide is an advantage.
The cost of building a hotel in Nigeria is not static. There are various factors to consider but to get an accurate cost for an investor’s preference; it is important to have an architectural and structural design drawing outlaid by a quantity surveyor. This will enable you to determine the exact amount of money you will need to pump into the project. The size, scale, number of rooms, terrain, and construction materials used in each hotel vary. As a result, your specific costs and percentages will differ. However, you can break down the many aspects of the hotel’s construction into percentages and categories that you may use to figure out where your money is going for this project.
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