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Nigeria 2018 | TOURISM | REVIEW

Nigeria's tourism sector has seen a dip in international arrivals in recent years, but industry leaders see new opportunities in domestic travel.

Nigeria's tourism sector has been under pressure in recent years due to the economic slowdown and corresponding instability. Africa's most populous country has much to offer, but a combination of logistical shortcomings and lack of necessary infrastructure has held the sector back at times. Hotel booking service Jumia Travel reported that 2016 saw the tourism industry contribute USD5.5 million to GDP, while 97% of this came from domestic travel, which reflects low interest from foreign markets and, more encouragingly, growth in intra-country travel. Continued infrastructure and transit issues will likely keep international tourist numbers low for the near future, but initiatives are underway to increase awareness and tourism volumes at key locations.

Data from the World Travel and Tourism Council (WTTC) shows that Nigeria lags well behind the global average in the tourism sector's contribution to GDP. In 2016, for example, the industry accounted for 1.7% of total GDP, which ranked 171st in the world. Growth for 2017 was expected to stay among the lowest in the world; WTTC projected an increase of 1.1%, 180th among recorded countries. The relative youth and underdevelopment of the sector can be seen in its low impact on the labor market. In contrast to many countries that have seen services become a larger part of the country's economy, Nigeria has around 1.8 million tourism sector jobs, equal to about 4.5% of overall employment. Just under 700,000 of these jobs were directly related, and WTTC projects that this portion of the economy will increase by 3.3% per year over the next 10 years. Long-term growth projections for the sector are slightly more positive but still subdued. WTTC expects the total contribution of the tourism sector to rise by an average of 4% to 2020, with this buoyed by an average 4.5% increase in FDI.

Nigeria saw the number of foreign visitors peak in 2010 with just over 1.6 million, but this fell by half over the next few years, bottoming out in 2012 with fewer than 600,000 international visitors. Foreign arrivals have risen slowly since then and were expected to reach 733,000 arrivals in 2013, but the sector still lags behind comparable African countries. South Africa, Egypt, and Morocco, the continent's three-largest tourist destinations, all saw more than 8 million international tourist arrivals in 2015, accounting for more than USD8 billion in direct contributions to GDP. Although Nigeria remained above the Sub-Saharan African averages in these categories, the nation's size and economic importance gives industry officials reason to believe that there is a significant amount of untapped potential in the sector.

International arrivals generally represent greater amounts of spending, but Nigeria has helped offset the lower number of foreign visitors with an increase in domestic travel. 2016 saw domestic travel spending rise to NGN2.7 billion, a 4.9% increase over the previous year. The country's weakening financial position played a major role in this, as falling oil revenues led to decreased consumer demand and drop in the exchange rate that made international travel prohibitively expensive for middle-class Nigerians. Moreover, decreased corporate expenditure and concern over stability led to a decrease in business-related travel to Lagos, which has long served as West Africa's MICE hub. Yet in the midst of this, industry leaders see new opportunity in the domestic travel sector. Jumia Travel analysts see new potential for the hospitality sector to take advantage of Africa's largest middle class by offering new packages for domestic travel and using new technologies to improve marketing and efficiency.
Lagos is Nigeria's most popular destination, accounting for almost 60% of all demand. Its status as the center of the African entertainment industry has driven tourism in recent years, and industry leaders have long-term plans to leverage Nollywood's size and continent-wide popularity into a destination as popular as its American counterpart. In contrast to Hollywood, Nigeria's film industry is less centralized and without as many physical landmarks, but the Nigerian Tourism Development Corporation has worked in tandem with private industry to take advantage of the inflows the industry provides. Tourism infrastructure is gradually progressing, with airport quality expected to improve after operations are handed over to a foreign concessionaire. New hotel infrastructure is coming to major cities, with Lagos expected to add more than 4,000 new rooms over the next two years, the most in Africa. The pending arrival of major international brands such as Hilton, Sheraton, and Ibis is further evidence that while the sector may be in its nascent stages, there is international confidence that Nigeria's economic growth will bring new visitors.