Though they have been in existence in Nigeria since 2011, the not so popular short let apartment leveraged the COVID-19 lockdown, a period when most hotels were out of business and were forced to close their doors to occupants, to record breakthroughs.
As the name implies, short-let describes furnished self-contained apartments that are rented for short periods, usually by the month as opposed to annual rentals in the unfurnished apartment rental market.
Short let apartments are firing shots at hotels as the big-wigs in Nigeria’s hospitality industry are losing market share to the smaller short stay ventures.
Not many people predicted that an industry as acute as the apartment and hospitality would become as economically fruitful and profound as it is now. A niche which has been carved for people who are willing to take up the challenge in its stride and run with it; it’s produced results that industry leads never anticipated.
The COVID-19 pandemic which resulted to a long closure of many establishments across the world did not topple the solid foundation of the Short let World. Rather, it improved the short lets business in Nigeria.
Low cost of the home-like short let apartment, the fear of hotel crowd and high chances of virus exposure, ability to choose the apartment of choice are top reasons short-stay apartment saw a boom in 2020, and is projected to maintain the same momentum in 2021, as compiled from BusinessDay survey.
Estimated at hundreds of millions of naira, Nigeria’s short let market is having a slice of the hospitality business in terms of the volume and value of transactions it is taking from the conventional hotels.
While data from Statista put the average occupancy rate of Nigeria hotels at 47.5 percent in March 2021, a survey by BusinessDay across three Nigeria’s busiest cities shows the average occupancy rate for short let apartments increased to 76.3 percent in March from 54.6 percent reported three years ago. Analysts believe short let holds investment opportunity for strategic investors.
Before the COVId-19 induced growth, short-let apartments in Nigeria were already gaining grounds as the owners of the hub for short let and the biggest in the world, Airbnb ranked Nigeria in 2019 as one of the fastest-growing markets globally for Airbnb.
Described as the most affordable option for long month stays. They are seen as an alternative to hotels. Some of the property operators permit pets, just like some people would ordinarily allow in their homes.
According to Tunde Balogun, CEO of Rent Small-Small, the supply of short let properties in Nigeria has grown to a stage that has surpassed demand. The many offerings in the short-let business must have stirred up competition and as a result influenced the relatively lower price charged by the operators as against the conventional hotel price.
While hotel remains the primary provider of hospitality services in Nigeria, the following are the reasons why short let is becoming a strong competition to the hospitality industry.
1.Cheaper alternative:
Accommodation and the right event venues are considered some of the most expensive items when either traveling or organizing an event. It also serve as a better and cheaper alternative to hotel accommodation, so you can enjoy the service of a hotel, in a residential environment and pay far less than a hotel. Short let apartments offer what industry players describe as “affordable quality” when it comes to accommodation. The affordable luxury nature of short let apartments is making the venture to become an alternative for hotels. According to data from Nigeria Property Centre, the average price of flats short let in Lagos is N65,000 per day. This is compared to the average of N100,000 or more charged per day by hotels for a similar apartment that falls within the three or four-star ratings.
2. A win-win for tenants and landlords:
While some landlords are directly reaping from the short let industry, others are enjoying early rent payment from their tenants who put out their spare rooms up for shot let. People go on vacations for an extended period leaving their properties vacant. These empty flats stay unused and bring them no added benefits. Renting out the building for a few months would make an extra source of income, at no extra cost. According to industry analysts, more Nigerians are expected to join their peers and list properties for short let and it would consequently lead to lower prices that will be enjoyed by occupants.
3.Complete Peace of Mind for the Homeowners and Tenants:
Short let is hassle-free for the homeowners, and it gives them complete peace of mind. A team of cleaners prepare the property for the tenants’ arrival (fresh linen and towels, wardrobe and fridge space). This continues if it is a serviced apartment. If it is not, the apartment is cleaned again when the tenants leave. And in the meantime, you’re getting someone to keep an eye on your house when you’re not there.
4.It is needed for flexible business travel:
Travel has changed. People are traveling more, and not just for leisure, employees have become used to flexible business travel with International companies looking to share skills and experience across the globe. When travelling for leisure people are looking to immerse themselves in the culture of the country, wanting to discover the best places no one knows about and when travelling for business, people want space and home-from-home facilities. Everybody wants to feel at home, whether on a business travel or for leisure. Let them have it, while you make more money.
5. Higher value in appreciation:
A short-let rental apartment obviously has a higher value appreciation since the rental value can be used as resources for other enterprises in a short period of time while turnover increases.
The Bottom line
Companies offering short-term lets have worked to make the process as simple as possible, taking care of the whole booking and payment process with just a few clicks. You also have your very own local host to tap for knowledge on the area so you can find all the best places that aren’t generally in the tour guides on the website. It’s a truly personal way to see a city.
Of course, high-end serviced apartments which also benefit from the attentive service you would expect from a top hotel are available for short lets. Each one-bedroom apartment oozes contemporary design with luxury finishes including cinema-style projector screen, wall mounted speakers, and fluffy bathrobes etc. you may never want to go home.
