How Honeywell Group Limited (HGL) is making strategic investments and building partnerships for the future

What could have been

Nigeria was expected to be the fastest growing hospitality market with an expected compound annual increase of 12% from 2019 to 2023 according to a PwC projection. At the start of 2020 however, the COVID-19 pandemic spread globally and the tourism industry was one of the hardest hit.

Globally, the tourism industry contributes approximately 10% to global GDP. This is expected to increase in four years with significant upward movement in Mauritius, Kenya, Nigeria and South Africa. In Nigeria, the contribution of travel and tourism to the country’s GDP was 5.1% in 2019. In 2020, however, the upward trajectory has slowed due to the pandemic.

With international and even local travel banned soon after the outbreak of the virus infection in Nigeria, non-essential travel was suspended. Travel for work and vacations has been suspended and the nation along with the rest of the world has been forced to go virtual as a method of work and entertainment. For this reason, hotels, tourist attractions and air transport are among the tourism-related industries that have been hit hard.

Job loss in the travel and tourism industry

The World Travel & Tourism Council estimates that 1 in 10 workers worldwide work in the hospitality industry. This translates to 1 in 10 workers losing their jobs due to industry being grounded by the pandemic. From March 2020 to approximately March 2021, many countries announced bans on international travel and the closure of restaurants and hotels while limiting gatherings. All of these measures have been put in place to reduce the spread of the virus. However, they have also affected employment in the travel and hospitality sector.

World Travel and Tourism Council regional director Andrew Brown revealed that “$4.5 billion has been lost by the tourism and hospitality sectors as a result of the COVID-19 pandemic globally and over 770,000 jobs have been lost in the sector in Nigeria alone.

This figure also closely follows the estimate that 1 in 10 Nigerians have lost their jobs in the tourism industry, which has also affected those whose goods or services are directly or indirectly related to it. For example, in-flight magazine production in Nigeria took a hit when the tourism industry suffered as a result of the pandemic. While magazine production would rightly be considered a media and communications industry, its target audience is tied to the travel industry, which ultimately means those who have worked in editorial departments , photography, writing, news gathering, composition, printing and distribution of the magazine. lost their jobs during the above-mentioned period.

Companies that also provide cleaning, entertainment and advertising services for travel and tourism businesses have also had to lay off their workers, cut their wages or, in some cases, keep them officially employed without paying them during the heat of the COVID-19 pandemic.

Beyond the examples mentioned above, there are other sectors and industries whose existence depends on the supply of goods and services to the tourism sector or which are part of the supply chain and which need that the industry thrives to profit from it. People in these sectors belong to the so-called “Other 9” whose industries are not considered part of travel and tourism but are critically dependent on the sustained operation of the tourism sector for their survival.

What does the future hold?

As the world tries to adjust to the changes brought about by the pandemic, the hospitality industry is also making a steady, albeit slow, comeback. Research by Jenny Southan, travel writer and founder of Globetrender, projected that “as people think more carefully about how they travel, they’ll be looking for hotels and travel companies that do everything possible to minimize their impact on the planet. We can also expect accreditation to grow in importance, as consumers seeking the assurance of legitimate ‘ecotourism’ certifications (visitors) will want to book trips that leave them feeling better than before when they they go back to their place. Wellness tourism will be increasingly popular.

Globally, there is an optimistic projection that the hospitality industry will make a remarkable comeback. However, only those who are prepared can make a quick comeback, and to do so requires understanding the unique changing needs of clients and customers. Nigeria needs to take a proactive approach in order to be on par with global best practice and not wait for others to take advantage of the relatively small market that has just come back.

A Harvard Business Review article referenced partnerships between or among companies as a way to provide shortcuts for companies in the race to improve their production efficiency and quality control. This symbiotic relationship provides a critical opportunity for rapid growth in a time when rapid recovery and adaptation to change is needed.

According to Deloitte, “In an environment characterized by significantly lower revenues, high fixed costs, less than optimal returns on assets and the need to conserve capital, hospitality organizations will need to determine which areas to prioritize and invest in. They will need to find the good balance between investment and conservation, the one that achieves the highest return on investment in the short to medium term. Some of these decisions will last, some will not. But the decisions made in the months to come will have an impact sustainability on hotel business models for years to come.”

This level of preparedness is evident in the way Radisson Blu Anchorage Hotel, a respected hotel brand and part of Nigeria’s leading investment holding company, Honeywell Group Limited (HGL), is promoting an alliance with the Bank of Industry to provide a foundation for the recovery of the hospitality industry in Nigeria.

This partnership is built on mutual respect nurtured by the Honeywell Group’s positive track record over the years. Our impressive performance before the pandemic, coupled with positive and sustained service delivery during the pandemic, shows a clear path to contribute to the growth of the Nigerian economy.

Nigeria needs more of these important partnerships in the hospitality industry to give it a much-needed boost.

Our relationship with the BOI has been beneficial and the Bank of Industry has proven to be a valuable business partner. The bank has supported us in building our brand as a leading hospitality company.

With this kind of long-term institutional support, the projected growth of Nigeria’s tourism industry, which has faltered due to the pandemic, can recover and eventually reach the expected height.

According to Deloitte,the COVID-19 pandemic will eventually fade. The economy will recover and the hospitality industry – from restaurants to hotels, from casinos to sports – will regain its footing and look confidently to a prosperous and prosperous future. Now is the time for businesses to act, adapt to the new normal, position themselves for agility, and thrive in the years to come.

The article was written by Kemi Adeoye, Chief Financial Officer at Honeywell Group Limited