Hotels raise security spending by 15% of profit

Despite  rising costs from  operations, taxes and bank interest rates, hotels in Nigeria are faced with the added burden of providing  funding for security estimated to be over 15 percent off their profits, BusinessDay has learnt from operators. Mostly affected are foreign brand hotels that cater for a wide international clientele.

The huge budgets, according to BusinessDay findings, are expended on acquiring and installing sophisticated security gadgets and hiring experts to man them. The monies also go into security training and collaboration with formal security outfits. The motive is to provide security for guests, especially foreigners.

This is spawned by security fears arising from the Boko Haram insurgency and the coming elections.

The development has also created jobs opportunities for many firms parading themselves as security experts and quoting exorbitant consultancy fees. 

Many of the hotels are taking these steps in response to the request of their big clients, especially embassies, multinationals and expatriates who are insisting on world-class security measures, as a condition for their patronage, in the face of  the current security challenges in the country.

A visit to top hotels in Lagos and Abuja, reveals the emphasis on security, right from the entrance, though some hotels still make less investment on this, due to their  location and clientele.

“We have bomb detectors that are effective from long distances from our perimeter,as well as 24-hour manned CCTV, sniffer dogs, metal detectors, patrols of private and foreign-trained security personnel, in collaboration with the Nigerian security agencies and other measures that I will not disclose.

“ We can afford to delay payment  for goods from our suppliers but not money meant for security”, a hotel general manager said. 

The general manager who pleaded anonymity, noted that hotel’s owners who were initially not so sensitive to security, have woken up to it, because of the impact of  security on occupancy rates and revenue.

“Before the bomb blast at the UN House in Abuja, we had over 120 guests in our hotel, 70 being foreigners. But they all left within 10 hours of the blast because our metal dictators were not working earlier.

“We lost revenue and some clients that vowed not to visit again. It is that bad. So you need to practically assure them of security before they visit”, the general manager said.

“We are paying great attention to security because if the hotel is not secure, no guest will stay here. Our hotel is investing huge on security and we need no prophet to tell us why the management is budgeting 10 percent of our profit for security”, Geoff Sanders, a financial manager of  a Lagos-based international brand explained.

Sanders noted that most hotels will not downsize because of the additional budget. Their owners and guests, according to him, would bear the brunt.

OBINNA EMELIKE