Stories by Bimbola Oyesola
There is a lot of words to describe running hospitality business: fun, exciting and profitable. But like cooking a meal, the success starts with the preparation and finishes with the service. However, for the President of the National Union of Food Beverage and Tobacco Employees (NUFBTE), Lateef Oyelekan, running an hotel business was borne out of necessity, the need to provide accommodation for members of the union spread across the country any time they are in Lagos for meetings. But the union later found out that it could be a good source of revenue provided it is run professionally.
So starting with a 50-room accommodation hotel, in the space of three years, the union was able to construct the second phase with event centre, swimming pool, gymnasium and other modern facilities. Hotel business falls under the hospitality industry and one of those businesses that can boost the economy of a nation if the potential are properly harnessed. Oyelekan speaks more on how one can run a successful hotel business:
Why hotel business
We decided to go into business generally. Looking at how wasteful the country had been in the past administration, we believe that there would be a time the country might relapse into recesssion like this. Hence, we believe we need to think ahead because most times there is crisis, our members suffer. Like now, we have lost a lot of our members due to redundancy that came out of the economic challenges faced by the companies in our sector. Besides, we normally incurred huge expenses each time we hold our meetings – the National Administrative Council (NAC), the National Executive Council (NEC) and our Delegate Conference.
Initially, we planned to build a guest house but later we saw the commercial value in running an hotel; that it can expand our financial base now that our check off dues are diminishing due to job loss. Besides, we looked at the maintenance of the 50 rooms; if we are going to use them alone, it would be awesome, so we decided to make it commercial and that is what gave birth to Food Union Hotel and Suites.
Challenges
Hotel business would have been the best but there are lots of challenge. In Nigeria today, there is no hotel that does not have generators and they have to be huge ones. The price of diesel to run generators is quite high; like in our hotel, we use about N3.5 million diesel in a month. But if electricity is working, that expense on diesel would have been part of our profits. Such money could also have been used to improve facilities in the hotel and welfare of the workers.
Lucrativeness
Despite the challenges, it is still profitable to run an hotel business. To really make money in an hotel, I would say the value addition facilities provided would create the niche for the entrepreneur, not just the accommodation alone. For example, our hotel has such facilities as event centre that can sit up to 1,000 guests, a conference room that can accommodate up to 50 people, a swimming pool, gymnasium, among others. Some of our management and others normally use our facilities for their meetings, retreats and events.
So far, we have no regret going into the business. Going into the business has made it easier for us to pay the salary of our workers, both at the secretariat and the hotel.
Though I’m not in the accounts department and would not be able to say specifically what the annual profit is, but I can say authoritatively that the first phase of 50 rooms was able to pay for the construction of the second phase, which has state-of-the-art facilities with additional 30 rooms, swimming pool, gymnasium, event centre and others within three years.
Requirements
There are other basic things that an entrepreneur who wants to succeed in this line of business must do.
•Draw up a business plan When opening your hotel, you’ll probably need to get start-up capital from either a bank or private investors, but for us, the hotel was built with our contributions. However, either option will want to see a business plan to determine if your business is worth investing in. Additionally, a good business plan is beneficial for you to organise your goals for your hotel and get a clear picture of how to make it a success. Make sure all guests have a great experience. In addition to other methods of advertising, word of mouth will be crucial. All of your guests could potentially tell friends and family about your hotel, post about it on social media, and review it online. You’ll want to do everything you can to make sure this feedback is positive. Even one disgruntled guest can hurt your business if he takes to the internet. If you commit to showing every guest a great time, you’ll establish customer loyalty that will give you great advertising.
•Offer deals or specials. Group discounts, free breakfast and lower rates for several-day stays are a good way to attract customers on a budget.
•Design a website. If your hotel isn’t on the internet, it’s basically invisible to your potential customers. You could design your own website but it may be worth the investment to have a professional work on your site – cheap sites are often easy to spot. At the minimum, your site should have the hotel’s name, location, contact information and nightly rates. •The person would have to spend money on advertisement; get necessary equipment and facilities. Above all, hire professionals and good hands to manage the business. Also, the owner of the business, as the chief executive, must be duly involved in the business. It is also important that you have industrial washing machine, have the water treatment in the hotel so that the guests would have good water, not just for drinking, even for bathing. Hygiene is very important.
Besides, you must be able to get your products directly from the companies without having to pass through the middlemen. That would further save cost and boost your profit.
I mean, such products like soft drinks, beer, juice, foods like semo, milk. Then you must buy your cow, chicken, goat live and slaughter them. This means you must have a pick up as well as a cold room for preservation. With those things in place, the hotel business is a good business.