Can Online Booking Unlock Nigeria’s Tourism Opportunity?
By Omar Mohammed | From Quartz
In economic terms Nigeria is best known as Africa’s largest economy and its number one oil producer, but unlike many other African countries, travel and tourism comes far down the list of GDP contributors.
But as Internet penetration grows, even as poor road network infrastructure continues to make it difficult to get around, the rise of local e-commerce is making it easier for Nigerians and visitors to explore a large and culturally diverse country which is yet to fully exploit its tourism potential.
One such e-commerce bet was made this week by investors in online booking platform Hotels.ng with a $1.2 million investment. It was backed by Lagos-based EchoVC Pan-Africa Fund, an early stage technology fund with roots in Silicon Valley, and Omidyar Network, an investment arm of eBay founder Pierre Omidyar. The start-up had already secured $250,000 of capital from Spark.ng, another Lagos-based firm that “builds companies” run by Jason Njoku, the founder of iRokoTV, the so-called Netflix of Africa.
Two key things are happening in Nigeria to create this market opportunity. First, the growing numbers of people with access to the internet. Second, the domestic tourism market is becoming increasingly lucrative. The World Travel & Tourism Council estimates the direct contribution of travel & tourism to Nigeria’s GDP in 2013 was 757.3 billion naira ($3.8 billion) or 1.6% of GDP. It was expected to grow by 2.5% in 2014.
In this context, e-commerce in Nigeria is becoming the conduit through which entrepreneurs such as Hotels.ng are filling the gaps in the market.
‘Three years ago it was impossible to book online in Nigeria. 10,000 hotels but [you] couldn’t find any online,’ Mark Essien, founder and CEO of Hotels.ng told Quartz.
Now, such a shift is possible. From 2013-14, the number of internet users grew by 16% to 67 million, according to data from internetlivestats.com. By 2025, half of all Nigerians are expected to be online. ‘As the entire online market grows, we grow as well as part of that,’ Essien says.
Read more at Quartz