Q3 2024 Hospitality Market Report
By Trollope Property Services
Trollope is a leading multidisciplinary property services company, privately held and incorporated in Nigeria, providing bespoke solutions across a range or real estate services to owners, occupiers and investors.
As a leading commercial hub and one of Africa’s largest cities, Lagos has consistently maintained strong demand for both long-term and short-term accommodation, solidifying its position as a prime destination for hospitality investment in the country and continent. The Lagos hospitality sector is largely driven by both corporate and leisure travel, with Foreign Direct Investment (FDI) being a key funding vehicle. Over the past decade, private sector investment in the hospitality industry experienced significant growth, leading to a surge in the number of hotels. However, despite steady capital inflows—Los Lagos accounted for 82% of Nigeria’s total foreign capital inflow in Q1 2024, according to the National Bureau of Statistics (NBS)—the rate of new hotel developments has slowed recently. The sector’s performance has been boosted by a significant growth rate in the Average Daily Rate (ADR).
From 2021 to 2024, ADR for rooms increased by an impressive 150%, rising from ₦35,000 to ₦88,000. Ikeja saw the highest ADR growth, with hotels averaging ₦115,000 per night in 2024, representing a staggering 250% increase from 2021. Ikoyi’s ADR rose by 115%, climbing from ₦43,000 to ₦95,000, while Victoria Island recorded a 140% growth, with ADR increasing from ₦35,000 in 2021 to ₦89,000 in 2024. This increase in ADR highlights the demand for quality lodging in key areas of Lagos, as well as the sector’s strong performance amid economic uncertainty.
The Lagos hospitality sector’s development pipeline anticipates its earliest delivery in 2025, with approximately 570 new keys expected across various locations. No significant projects are slated for delivery in Ikeja, one of the biggest submarkets in Lagos’ hospitality industry. Key developments include the Ibis Hotel Lekki, which began construction in 2021, and Novotel Victoria Island, a rapidly progressing project that will add 170 keys by 2025.
The short-let market in Lagos continues to thrive as more users opt for short-term accommodations that offer a homier experience compared to traditional hotels. This growing demand has led to the conversion of numerous residential units into short-let spaces, with serviced apartment providers actively taking up new developments. A prime example is the recently completed Garden Court on Olumegbon Road, which caters to this expanding market. In terms of pricing, daily rates for short-let apartments in Ikoyi range from ₦75,000 to ₦300,000, with an average of₦200,000 per day. In Ikeja, rates vary between ₦50,000 and ₦200,000, averaging ₦160,000 per day.
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