The MD/CEO of Transcorp Hilton, Valentine Ozigbo, spoke to some news men in his office on the state of the economy and the need for tourism to have a separate ministry. He also spoke on the challenges facing prospective hotel investors, and other issues. Exerpts:
Sir, introduce yourself.
Valentine Ozigbo is my name; I am the Managing Director/CEO of Transcorp Hotel Plc., the owners of Transcorp Hilton.
Your organization is the meeting point of those who move the economy and you are also a big player in your industry. How has it been over these years?
Transcorp Hilton Abuja is the beating hearth of Abuja. It is a place of convergence for a number of businesses, and also for leisure. We feel the pulse of the nation right from here. We are able to listen to all the sides.
Looking at what is going on in the economy, I think the administration, I will say started a bit slowly but they have picked up the pace, and things are improving. The reason we have seen; is that Nigeria is slipping out of reception. Yes, there is still some delicacy: meaning that if we don’t take our time we may slip back into recession. But given the economic recovery plan of the government the effort being made to execute those plans are efforts to resolve issues around power infrastructure. There is still a lot that we need to deal with. I think we are off it. Nigeria is obviously hoping for better times ahead. But I also warn that the parity in exchange rate is too unsustainable. If you look at where naira/dollar parity is today, official market is about 360, 364 depending on if you are buying or selling. If you have any feasibility you find that it will be impossible to do any capital project, and make money. And to that extent it is unsustainable.
So I will be challenging, especially the central bank and the people in charge of our fiscal and monetary policies to look into this and find ways to build confidence and see how money flows. We will get even much more, develop and enhance the competitiveness of Nigeria environment. And with that there will be foreign direct investment, and also you will find out that the local investors will be extremely happier for it and ultimately you will begin to see naira appreciate and dollar depreciate. When that happens, when we get the type of number we think naira should have depreciated to, may be in the range of 250 and not 306 or 360 or thereabout. When we get that range it can become a sustainable environment once again. So that is where I see Nigeria today.
Hotel business in Nigeria and tourism do they have any relationship?
You need to understand that tourism is main stay for a lot of economies in the world. I am shocked that we are where we are in tourism. For a lot of people who drive tourism to their pick, they don’t ever have anything near what we have; you cannot separate tourism and hospitality. They are completely intertwined. As a matter of fact, hospitality is only a part of the entire tourism industry. With tourism industry you can get into areas like travel and logistic providers. There is a way it is connected to every other thing that happens around the world. It means that it also provides a supporting role to every other business. Where it is politics, commercial transactions, you need hotels, you need accommodations. You need people to come and be taken care of and go back with positive impression and have to come back again and have good memories to go with. That is what Transcorp represents. Therefore that is a very important part of our socio- economic of diversification.
Government should pay a very strong attention to that. Quite frankly I have been very happy with what the Senate is doing. Just recently, they passed such bills like the NIHOTOUR (National Institute for Hospitality & Tourism) bill and which is aimed at supporting people who are going into tourism in Nigeria. We need to see more from the executive. One of the things everybody will be shouting is that tourism has to have its own ministry. You can’t combine information and tourism. Tourism is a huge area, an area we need badly, it requires a lot of momentum, a lot of strategy; and mixing it up with information is paying lip service to it. Government needs to do more. A number of other things we obviously need to do are; we need to develop infrastructure. We need to build the system, capacity, choice sites in a commercial and sellable condition. We need to promote destinations; where the minister of FCT will be promoting Abuja as a destination.
Promoting destination is something you must do so that all the entities around it will begin to benefit from that destination.
What is it that you are selling to people? We are supposed to have places we can be proud of, like Transcorp Hilton.
What expansion plan do you have now and in the long run for your organization?
We do have a number of initiatives we are undertaking. Our expansion strategy is twofold. One is in the area of geography and the other in the area of product. By geography I mean Abuja and Calabar currently. We are planning for one in Lagos, and another one in Port Harcourt. And ultimately in a number of other cities; that is geographical expansion. But even within these geographies that I have mentioned we also have introduced products expansion; meaning we are introducing new products, new activities that will excite our customers. So we will introduce a multipurpose banquet centre that will take the capacity we have at the congress hall. It will be bigger so that big events can be hosted there. We are looking at other tourist attraction. We want to do a hotel in Lagos. Leisure will be uppermost on our mind. Some will also want to play with water tourism sites. Meaning; if you have to build anything around the water shore and people can take their families and play with water, climb the balloon. All of those activities we are planning.
What has been the greatest militating factor is the issue of FX because a lot of these things are products you have to import and when you import them, this FX rate I have talked about, you need to convert and charge in naira. And they don’t make sense. If it is something you are going to break even in 5 years it will take 15 years to break even. And the question becomes, why I should do that. If I have to take 15 years to make money I can obviously put the money in treasury bill and earn 20% or more on it. And that is Nigeria today. It is not sustainable.
What areas do you think the government should do more to move the industry forward?
I have said that Nigeria should have a specific tourism ministery, that is number one. Number two, the bills have been passed, we need to execute them. It is not about passing bills. We need to execute tourism bill, we have to bring them to action. And by doing that you are strengthening those institutions. You are creating standardization in Nigeria.
There are several things we haven’t even developed. There are several things we can develop as a country: Like supporting the market players. For some of us who are looking to building hotels, what are the incentives? Tax holidays. Giving us accelerated approvals when we need it. Some of my approval request have been pending for two years. That is the nature of Nigeria.
Thanks for your time.
You are welcome!