Austin Eruoto, the President of White House Hotels, recently marked 10 years of the brand in Lagos by giving a little back to the less privileged. He also shared his experience of toiling the soil of hospitality.
Among other issues, Eruoto spoke with Senior Correspondent, GODDIE OFOSE, on why Nigeria’s hospitality industry is of poor standard, unlike what obtains in Ghana and Benin Republic.
Assessment of White House at 10
First and foremost, the media have been fantastic to White House and without your support we couldn’t have got to where we are today. From inception, you have always been with us.
It has been a very long journey but we thank God because 10 years is not a joke to stay in business in a country as tough as Nigeria and where the government is not ready to support businesses. It is even tougher when you don’t have access to regular public power supply.
There are other factors militating against business, particularly the hospitality business in Nigeria. However, we are still in business and I believe we still have more years to go.
In the past 10 years, we have grown steadily despite numerous challenges. A journey of 1,000 miles begins with one step; we have already taken many steps.
From Toyin Street and Ikeja GRA (government reserved area) where we are now, we are looking for opportunities to take the brand to many cities. So, we are still growing and we thank God for that.
Business objectives realised?
We started with entertainment but today we have a full hospitality bouquet. We are not just on Toyin Street, we are in Ikeja GRA. This is our major flagship at the moment and we are still trying to go to other places. So far, we are moving forward.
When we came here (Toyin Street), we started with the ground floor, and after five years, we acquired the whole building. Prior to this time, we didn’t offer accommodation here but today we have a 30-room accommodation facility.
As part of growth mechanism, we have now moved to Ikeja GRA, which is a bigger facility compared with Toyin Street. There is no type of activities we can’t host in the Ikeja GRA facility.
It is world class and everyone wants to be there. Government officials, ministers, governors, senators, businessmen and expatriates come there on a daily basis. The corporate world is not left out.
This means that we are gradually achieving the objectives we set for ourselves some 10 years ago.
Impact of Nigeria’s economic status on hospitality
There are so many hotels coming up in almost all the key cities in the country. When we started on Toyin Street, you could count the number of hotels here, though many could only pass as guest houses. Today we have some international brands on this street.
At Ikeja GRA along Joel Ogunaike, we were only four hotels but today we have about 14 on that stretch alone. There are four hotels under construction.
Nigeria is a big market and so many brands, mainly international ones, are coming to the country. These brands have realised that and they make a lot of money in Nigeria because of our population, our oil industry, and we have a lot of other mineral resources that encourage investment.
Many investors in the world are realising that Nigeria is a place to be, despite our security challenges. And when you look at the American economy, they are not doing well, and the European economy is at a standstill.
Nigeria has become a beautiful bride of the world economy; there are a lot of opportunities, which do not exist in America and Europe. Nigeria is the place to be now. Everybody is coming to Nigeria in spite of all the negative publicity we get.
For instance, Nigeria is the only place in the world where you can make 100 per cent or more of your investment. But the locals do not realise this. We don’t appreciate what we have. The whole world is coming here.
If our government changes its attitude you will see Nigeria at the forefront.
Why there is huge ROI in Nigeria
The government is still far behind, a lot of things are not in place, we don’t have infrastructure. Our laws are weak on foreigners. Nigerians do not get things easily the way other nationals get them here.
Our financial policy is faulty, foreign investors pull funds from abroad and invest seamlessly where local investors find it difficult. In Nigeria, a bank prefers to grant foreign investors facilities despite the fact that they do not need to borrow, but locals sweat to get one quarter of what is given to foreigners.
These are the possible reasons that return on investment (ROI) in Nigeria is very high compared to other markets. There are a lot of opportunities here.
Reasons for low standard hospitality in Nigeria
Several factors contribute to the low standard of the hospitality business. Though there is a huge improvement compared to what happened in the 90’s. But basically, government policy has impacted negatively on everything we do.
For instance, banking; the interest rate is as high as between 25 per cent and 30 per cent. How are you going to pay back, let alone make profit to stay in business? Power supply is a big issue in Nigeria.
For instance, Ghana and Benin Republic have constant public power supply and can’t afford to compromise on standard because they don’t have any reason to do so.
If I tell you how much we spend on diesel, you will be surprised. A country doesn’t develop faster with generator power. The money used for diesel is supposed to be used for training and other things that will improve standard.
We are using the money to buy diesel and generator. A generator is supposed to be a backup but public power is a backup here. Imagine not having power supply for one week and nobody is doing anything about it.
Other African countries have the facilities on the ground and their population is not as big as ours. Look at this business for example; if I am in an organised economy, we would have been all over Nigeria by now. The banks will support me. Other African country are more organised than us.
Hotels are everywhere, where do they get funding?
From the private investor, we have a lot of foreign brands coming to Nigeria. They have now realised that Nigeria is a goldmine. When you look at the average rate of hotel accommodation in Nigeria compared to Europe, Nigeria is very high.
Nigerian hotels are very expensive because we don’t have infrastructure. Some of these foreign brands that come here are very low brand in their countries but when they get to Nigeria, they become a very high brand.
For instance, they charge between $30 and $40 per room in Europe, but charge between N29,000 and N30,000 in Nigeria. So, all of them want to come here.
What they make here, they can never make in their country. What they make in 10 years over there is what they make in one year in Nigeria.
Any five-star hotel in Nigeria?
Can you tell me any hotel in Nigeria that has more than 200 rooms? You can count them on the fingers in one hand, even in Lagos. Can Nigeria host the Olympics Games today? Certainly no, it is not possible because we don’t have enough standard hotel accommodation.
If we are to host the Olympics today and two million people come to Lagos, how are you going to accommodate them? Anybody can claim a five-star hotel but I know the industry is still far behind five-star standard.
Effect of Ebola on hotels
Thank God we managed it well. The occupancy rate fell because people in the oil industry went back, everybody was scared. The Lagos State government rose to the challenge and other states followed. Those who were supposed to come in could not.
But thank God for the way Ebola was managed. Even Nigerians in their homes didn’t come out until Nigeria was declared Ebola free. The hotels are booming again.
Shortfall of naira and kobo because of Ebola
I am sure it will run into billions of naira because most people who came to Nigeria to work, especially in the oil industry, quickly ran back. Thank God for someone like Dr Stella Adedevoh who sacrificed herself for others to live. These are the kinds of people to be honoured.
Customer service
When you are in the hospitality business you meet the good, the bad, and the ugly. You have to find a way to manage them. The main challenge I have is the marketers.
I once employed marketers, some of them graduates, one was even a lawyer. They worked with me for three months, but none could bring business and they were collecting money. They collected N10,000 every week for transport but couldn’t bring business.
But we have overcome all that now.
Giving back
I am giving just a little back. When you look at the country from what I was saying about leadership before, we are all leaders. Everybody must give a little back to the system.
The next decade
We want to see a change in Nigeria. I want to see a five-star hotel. Each time I travel abroad I always come back with something. We have to keep on improving until we get there.
Succession plan
My dream is to have children who will overgrow me, maybe after 100 years. Not just my son. I have people who work with me. The biggest assets are the people who work with you every day. People who work with you every day are like your family.
We have a plan, not just for my son. The problem we have in Nigeria today is recycling of people. You have to allow vibrant people who are young to take over. I have the same vision for others to take over, people who are strong to build this brand.
Nigerian food in African hospitality
It depends on who is coming in. Some foreigners want to try our food. I have white people who drink pepper soup. But when you are operating hospitality business, you provide for everybody, not just your country food. You have to be international. That is what tourism is all about.
When you travel abroad you will see Nigerian restaurants where they sell Nigerian food. I have many Indian and Chinese customers, I have to get their food. If I don’t , they will go to another place. Don’t forget there is competition in this business. You have to go to the market to get customers.
One good thing about Nigeria is that when you have a good product you must sell. Good products will enable you to survive competition.