A Push For The Laggard

The Odua board settled for Golden Tulip after flirting with Protea, the South African hotel managers, two years ago. The final choice was informed by the understanding among the Odua negotiators that Protea only seek to nick concessioning and impose its brand name on its partnering hotels without practically committing its own men and time to management. In the real sense of it, local owners of Protea’s hotels do the running.

Golden Tulip, on the other hand, LAHL’s owners concluded, would be better, result-oriented on-the-spot administrators. Odua and LAHL officials, last year, visited Ghana to assess two hotels in Accra (224-room) and Kumasi (100-room), being run by Golden Tulip. The team’s flowery report to the Odua board contributed extensively in picking the Swiss hotelier.

The foreign managers will work further on the modest achievements of Adenigba and his immediate predecessor, Alhaji Niyi Badmus, who came on board in early 2005. Before Badmus came in, LAHL was barely limping on. There were question marks on the state of the rooms and service quality. The hotel’s huge central cold room had packed up and management has, for lack of cash to replace it, been making do with makeshift freezers for its refrigeration necessity.

The cash flow problem, TheNEWS gathered, was largely self-inflicted. Apart from the debilitating traditional civil service bureaucracy, certain decisions considered by investment advisors as financially unwise and antithetical to business growth were revealed to have been taken by the Odua board in respect of LAHL. One such decision was the alleged dip into the hotel’s purse of the sum of N250 million, in loan, to prop up National Bank of Nigeria in the wake of the Central Bank of Nigeria’s directive that all banks recapitalise to a base of N25 billion. National Bank, like the Lagos Airport Hotel Limited, was a subsidiary of the Odua Investment Company.

Eventually, the Odua board, financially unable to keep National Bank alive, decided to merge it with the larger and more stable Wema Bank, in which it also has a majority stake. LAHL’s huge loan to the swallowed bank has since been been written off as irretrievable.

It was also believed that LAHL contributed substantially to the take-off capital of O’net, a telecommunications company also owned by the Odua Group. Although O’net stuttered initially, it currently appears stable after the owners brought in an Indian, Madhavarao Kesavan, on contract as its managing director and chief executive officer.

Besides these conduit pipes, LAHL’s revenue generation is understood to be hampered by privilege abuses from board members, management and staff. The penthouse and executive suites that shoud yield returns were said to be sometimes arbitrarily annexed by some board members, and politicians from owner states who run huge credit bills. Adenigba lampooned such prominent patrons from the South-West who believe they have a stake in LAHL and expect free services.

Badmus and Adenigba’s major challenge has been to improve the company’s performance measured in terms of good returns on investment, profitability, growth and development. To achieve this, management resorted to the application of systematic management to maximise profitability and strong marketing objectives. The systematic management included the development of new revenue sources, products and other means of repositioning LAHL’s capital base. The management has refocused on maximum utilisation of the conference/banquet halls and swimming pool arena through the introduction of a number of leisure activities which have been attracting numerous customers.

This repositioning effort is already paying off. Although the company recorded a loss in 2005, it made substantial profit in its 2007 financial year. Bouyed by this performance, LAHL is recommending a dividend payout of 20 per cent of the profit after tax for its owners.

The hotel management has been striving over the last one year to improve on services. It has been working on the rooms to ensure customer satisfaction and has given the Independence building a coat of paint. It is also ensuring internet facilities are always operational and working on a system that speeds up delivery on customer orders. Adenigba dismissed the notion that the hotel is in a pitiable state. But he admitted occasional report of poor services, for which he would not wholly blame the hotel staff. He attributed it partly to the unwillingness of some customers to get served at the hotel’s restaurants but would rather prefer to take meals in their hotel rooms. This, he noted, could take some time to deliver.

He also mentioned that certain uncontrollable factors could slow down service delivery. Constant power failure from the Power Holding Company of Nigeria, for one, has not helped matters for the hotel, although the CEO said there are standby generating plants to take care of that end.

This magazine, last week, observed some apprehension among LAHL staff as they await the arrival of Golden Tulip. Although there was a consensus the arrival of the hotel management experts would elevate standards and further project the hotel’s status, there were fears the new managers would reduce the workforce. Assurances from Golden Tulip during discussions with LAHL’s management and union leaders have not been able to calm frayed nerves. Beyond retrenchment, workers expressed the certainty that vices like latecoming, drunkeness, gluttony, wastages and nonchalance which weigh heavy among them would be curbed.

With some board members, politicians, management staff and junior workers so obsessed with free lunch, as it were, there cannot but be stiff opposition in some quarters to whatever private management initiative. And, as this magazine learnt, the rebellion against it has been why a private manager is just coming in the face of a glaring slide in fortunes. But after years of flip-flops in decision-making, the agreement signed in Lausanne, Switzerland, seems to be the seal. For the Lagos Airport Hotel Limited, a new era begins.