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The Nigerian Connection

Here’s an intriguing look at how a burgeoning local film industry is goosing this West African nation’s hotel business.

Monday, February 18, 2013
Caryn Eve Murray
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The plot is the stuff of movie-screen dreams: a young and well-liked upstart struggles in the complex realm of the entertainment world, hoping for that big break, whether in the form of a kindly casting director, a friend-of-a-friend with an eye for talent, or – in a more magical vein – an alignment of the planets in the heavens.

To fans and followers of the Nigerian movie industry, Nollywood could well be that wide-eyed young understudy. Nollywood, which produces, by some estimates, more than 2,000 popular films on famously low budgets, is the nation’s second-largest employer, according to the research group, Consultancy Africa Intelligence. And lately, Nollywood is being cast by many as the potential catalyst for fame and upbeat fortunes for growth, especially in travel and tourism.

But whether the planets align for this still-nascent industry, creating that ripple effect, remains to be seen. With commercial movie theaters less ubiquitous throughout the African continent, and film distribution channels still immature, Nollywood instead relies heavily on its robust sales of videos for home viewing. Published estimates place the industry’s value at well above $250 million.

In recent years, a number of hotel companies have not only become Nollywood fans but are auditioning to become its best supporting players – among them, Starwood Hotels & Resorts, which already has five hotels in Nigeria and is poised to open two more in 2014 and another in 2015.

Nigeria has become “the company’s largest growth market on the African continent,” said Penny Biram, a Starwood spokeswoman. “Nollywood’s popularity has become a major growth driver in the leisure sector – and in turn boosted Nigeria’s tourism sector,” Biram said, writing in a recent email from South Africa.

“Arrivals to the country are growing and this trend is expected to flourish even more over the next few years, attracting film fans and business travel boosted by the growing economic importance of the film industry,” Biram said. “Euromonitor recently reported that in 2013, the region is poised for continued strong growth in arrivals, incoming tourist receipts, air travel and hotel value sales. Intra-regional travel is crucial for the African tourism industry, due to strong business, linguistic and cultural links between many countries.

“As Nigeria’s movie industry develops and produces films of improving quality, movie stars will also become another attraction for tourism in the region, so it is imperative that hotel groups expand to meet this demand.”

But for such projections to become reality there needs to be expansion in one crucial area: public safety, said international consultant Peter Tarlow, a specialist in tourism risk management. “I think the real issue for them is can they get their security under control,” said Tarlow said.

He said the entertainment and tourism industries, as well as local governments, must follow the example set by Nigeria’s leading industry – crude oil production – and invest in measures to ensure adequate policing in a region well-known for its crime rate. Protecting workers, as well as travelers arriving to do business with the industry, is critical, he said.

“Just filming a film is not going to bring people to Nigeria,” Tarlow said. “What they are going to have to do is really change their image. I would say to them, ‘get your safety under control.’ It won’t happen any other way. A film will give a temporary boost to a place if it is a world smash film and people want to see that particular place. But if [travelers] get there and are ripped off or if it is crime-ridden, that will boomerang into something negative.”

Some view one recent Nollywood release, “Streets of Calabar,” as a signature for change. The film received acclaim throughout Nigeria, and not just from movie critics. The comedy-thriller was hailed for its departure from the norm for being a higher-budget, more painstakingly produced, slicker movie than its predecessors. “Streets of Calabar” scenes showcase tourist magnets throughout the Nigerian state of Cross River, a feature that moved the country’s Minister of Culture and Tourism Edem Duke to herald the production as a blockbuster. Duke endorsed it as well for its portrayal of strong local law enforcement – a clear and not-so-tacit message in the film, designed to present an image of greater physical safety.

“The film portrays Nigeria and especially Cross River State to the outside world as a good tourism destination, also shows Calabar [the state’s capital city] with adequate security,” said Paz Casal, travel and tourism analyst for Euromonitor International. Euromonitor had forecast Nigeria’s growth as a travel destination in its Global Trends Report and released those findings last year at the World Travel Market.

But images, even positive ones, are the stuff of dreams and movies and still do not change reality, said Tarlow. And in his eyes, entertainment needs to go beyond the amusement factor to take root in a meaningful way to grow business and to ensure safety.

“The film-industry alone,” he said, “no matter how slow-growing at this point, is not going to be the sole engine [of hospitality growth.] Without added security measure, it just won’t happen. For it to really grow, you need political security, economic security and physical security.”

Still, said Casal, hospitality “represents huge potential for investors and has recently seen an increase in foreign direct investment, stemming from the development of hospitality infrastructure. In the search for high-growth markets, several international hotel chains such as Hilton, Sheraton, Best Western and Marriott have moved quickly to gain a foothold in the country. The nation’s booming economy as well as efforts by the government to develop a competitive travel and tourism industry has been attracting Western hotel giants to establish operations in the country. Continuous expansion of the business environment in Nigeria will help to stimulate economic growth and is expected to further improve hotel growth as well as boost occupancy rates in the future.”

Perhaps, said Tarlow, but it is most likely that the majority of the hotel operations putting down new roots would be franchised rather than company owned, if only to minimize risk.

Casal said the Euromonitor report does acknowledge the security challenge, especially with the number of incoming tourists and receipts projected to achieve a CAGR of 3 percent during the next five years. It is a critical time, he said. “To ensure the growth of travel and tourism to international standards, there is a pressing need to look into fresh ideas on how to address challenging issues such as inadequate infrastructure and security.”

To Tarlow, that will determine the all-or-nothing for tourism success, with or without the Nollywood influence. “Tourism is based on a choice,” he said. “Nobody puts a gun to your head and says you have to go visit Honolulu or Los Angeles or someplace else.” And for now, he said, Nigeria will still be a tough option to choose.

Caryn Eve Murray
Associate Editor
Hotel Interactive® Editorial Division

Bio: Caryn Eve Murray is a freelance writer and an assistant editor on the news desk at Newsday on Long Island. During her tenure as a business writer for New York Newsday, she covered the city's small business community for which she won the Distinguished Business Reporting Award of Excellence from the New York Newspaper Publishers Association. She has also been a feature columnist and writer and has ...
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