Business / #ForbesBusiness

August 13, 2018,   3:45 PM

Lebanon’s Restaurateurs Are Cashing In On Nigeria’s Booming F&B Industry

Abisola Owolawi

I write about business, entrepreneurship, innovation, wealth and culture with a focus on global impact. Innovative, groundbreaking ideas and the structures that drive them over time, inform my subject choices. I cover industries that span manufacturing, service, technology, entertainment, healthcare and aviation among others, across Africa for Forbes Middle East. I have previously worked as Forbes Africa’s West Africa Correspondent, a wealth contributor on the annual Forbes rich list and as a CNBC Africa business contributor. FULL BIO

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Be it restaurants, hotels, bars or vibrant nightlife hangouts, Nigeria’s hospitality industry pulses and brims with great promise and an army of enterprising Lebanese are cashing in on this industry.

As Africa’s most populous nation, the logic is simple – it is a number’s game attributed to a growing middle class, rapid urbanization and a large influx of foreigners. It is, however, also a very fragmented market plagued with infrastructural bottlenecks, high operational costs and a dented global publicity – but these challenges are not too daunting for the Lebanese mavericks that run most of Nigeria’s successful hospitality ventures.

With the exception of few local players, what places the Lebanese entrepreneurs at the forefront of this market?

“The market here is very reliant on our expertise in this industry as we are considered the most experienced people to set up and run the outfits,” says Bilal Jamal Eddine – a Lebanese hospitality consultant who moved to Nigeria 14 years ago as Head Chef for a new facility. Eddine, who has since worked on over 26 hospitality projects in Nigeria and serviced over 47 private jets as an Executive Chef, said that business savvy Lebanese people have been able to fill a market gap in the African country’s hospitality sector.

Hailing from a family of seven chefs, hospitality is second nature to Eddine.

“Lebanon was the first place in the Arab world to truly innovate in the hospitality business and we have always been very attentive to the details of this industry. We have spent years studying to finetune our skills in hospitality to deliver first class experiences. We are sticklers for exceptional service and this is our edge,” he says.

Although the market is fraught with challenges, Eddine believes that the returns from the market far outweigh the challenges and an intensifying competition.

“We are here to make money and yes, we make tons of it. This market relies on foreign expertise and training to manage their facilities a lot more than hiring locals. Nigerians are big spenders and this industry is an investor’s dream.  I see no competition. There is room for everyone to blossom,” says Eddine.

But not all restaurateurs share Eddine’s views. Nahi Halabi, a third generation Lebanese- Nigerian, sees competition as rife but necessary for the industry. He and his partner, Maya Halabi, run R.S.V.P – a very trendy restaurant and outdoor bar in the heart of the Lagos Island. Even though their restaurant is a crowd puller, especially at weekends, Halabi’s vision is more long-term and not necessarily focused on overnight returns.

“We want to look back in twenty years time and be able to say that we were a part of this movement and this is where we are today. It is a very competitive market but I do believe that competition is good both for the consumer and the operator because if I learn a new way to please the consumer, I become a better operator”. He says.

Like Eddine, the Halabis are confident about their place in the Nigerian market.

“An eye for detail and generosity are inherent in Lebanese culture. We have been taught these skills since childhood. A lot of Lebanese come from small villages, where the mentality is a very welcoming and hospitable one - but in addition to this, we also have very respectable institutions that teach hospitality and service thoroughly across varying specialities. There are very prominent universities that offer these courses as majors as well as technical institutions for those who aren’t able to attend university. This is what makes us particularly skilful at this”.

No doubt a master of his craft, Halabi still keeps his expectations realistic and holistically grounded as he highlights a squeeze in consumer spending that have forced households to re-evaluate their spending priorities.

“The percentage of people who can afford to dine out is very small and those who can afford to make it a lifestyle is even smaller, these days. As the hospitality industry relies on returning customers – this is a challenge. So, it is not so commercially appetizing at the moment but what makes it worthwhile is that this is a growing industry and we can play a role in the long term. The attitude of the Nigerian consumers is very open and they are hungry for new ideas. The proliferation of social media here has also helped and even though I know as much about food as I do about operating power generators, I am very optimistic and respectful of the openness here.”

The tastes and demands of the African market are very diverse. Coupled with a growing expatriate community across the continent, diversification in range, quality and standardization becomes necessary. While the infrastructural challenges of operating in a market like Nigeria would differ from that of South Africa or Kenya in East Africa, it is noteworthy that Nigeria is still a preferred market amongst Lebanese players.

It is estimated that between 2018 and 2028, travel and tourism will contribute 4.3% to Nigeria’s GDP (N3.61 billion), over $10 million year on year.

Beyond its economy, the Nigerian labour market also benefits tremendously from the sector’s viability. According to (Nigeria’s National bureau of Statistics), tourism and travel industry is estimated to rise by the end of 2018 to generate approximately 1.3 million jobs (as the number of direct jobs created by the sector peaked at 1.2million in 2017 compared to 651,000 in 2016 (1.6%)- that is 1.8% of total employment.)

However, such figures have not led to many players within the industry.

“Nigerians haven’t played aggressively in this industry because of a lack of thorough industry knowledge,” says Pierre Karam, Group operations Manager at Blowfish Group, a 12-year old diversified lifestyle company with a 55- room hotel, 5 cross-cuisine restaurants, a nightlife lounge and a supermarket chain.

Despite its potential, Nigeria’s hospitality educational scene is still at a very nascent stage -posing a major challenge to help develop homegrown talent.

With a reputable banking sector with high financial standing, Lebanon, on the other hand, benefits from highly experienced human resources in the tourism industry. Moreover, its economy is based primarily on the service sector which accounts for approximately 60% of its GDP.

Lebanese expatriates in Nigeria work across sectors including trade, telecommunications, energy, construction and hospitality.

“Hospitality is our signature. We are a service-oriented people, and this is an area still lacking in the Nigerian system,” says Blowfish Group’s Karam.

Despite its profitability, Karam understands that this is a tough market and a thorough understanding of doing business in Nigeria is important for players and investors.

Like Eddine and the Halabis, he attributes the biggest challenges to a constantly changing regulatory market and lack of accurate data to aid structured expenditure plans for new projects as well as an unstable currency.

“Lagos is the heart of our business. The lifestyle here is different and there is a round the clock pulse as opposed to Abuja (Nigeria's capital city), which isn’t as fast-paced. Other parts of Africa such as Cape Verde, Tanzania, Kenya would interest us.  The infrastructural challenges there are non –existent but we have got the advantage of numbers here,” he says.

Investment costs vary in accordance to size and standard of operations.

“The stability of the currency plays a huge role,” says Halabi. “The product that you want and that which you achieve is really a direct result of how much money one wants to invest and how smartly one wants to do this. A project that could cost $600,000, could also cost a million dollars if you don’t know what you are doing. Rent in parts of Lagos is very high and landlords ask for years in advance, which is hefty.”  Both Eddine and Karam echo his thoughts.    

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