Developing a hotel in an under-developed market can be challenging, especially when there is limited up-to-date research on the hotel market in that region. For this reason, many developers, hotel management companies, and financiers require a market study to be completed prior to commencing with hotel development. A hotel market study provides finite detail about the hotel’s operating environment, as was evident for a recent hotel market study completed by HTI Consulting in Monrovia, Liberia.
Usually, a hotel market study will incorporate research on both the supply and demand for hotel accommodation within a particular market. Interviews with the management staff are conducted to ensure that the hotel market study provides an accurate representation of performance and current challenges, as well as an overview of the operating environment. With regards to the demand side of a hotel market study, numerous demand generators are interviewed, which provides insight into the use of hotels in a particular market. Depending on the market, demand generators, such as corporates, embassies, and NGO organisations, are surveyed when conducting a hotel market study.
Given the immaturity of the hotel market in Liberia, it was necessary to compile a hotel market study that provided a snapshot of the current performance present in the market. On-the-ground research was conducted during the hotel market study, with interviews highlighting the hotel market’s slow but steady recovery after the Ebola outbreak in 2014. Prior to the outbreak, the hotels that were interviewed during the study indicated occupancies in excess of 75%. This was due to the small size of the market, with approximately 361 quality rooms, coupled with high levels of demand from the NGO and embassy market as the country’s economy started to stabilise after the civil war.
The study indicated that the market saw a massive decline in occupancies due to the Ebola crisis, as numerous corporations withdrew their business activities in the country. The level of occupancy dropped well below 35% during the initial months of the outbreak. However, several quality supply hotels that were interviewed during the hotel market study noted an increase in performance as the influx of aid workers required short-term accommodation, resulting in some hotels achieving a level of occupancy between 55 and 65%. Overall, the hotel market study conducted in Monrovia showed a recovery in performance since 2015, with the levels of occupancy averaging 68% amongst the quality establishments.
The study in Monrovia highlights the importance of a hotel market study. It provides on-the-ground research and accurate data regarding the performance of a particular market, which is especially useful when other data sources are not available.