Lagos Has Become One Of Airbnb’s Fastest-Growing Economy Globally

It’s unlikely that Lagos, Nigeria’s bustling economic hub, ranks very high on the bucket list of tourists who want to visit Africa.

Unlike cities in South Africa, Mauritius or Morocco, Lagos is known more for its ever-busy business district than for any picturesque tourism hot spots. Yet, Africa’s mega-city, home to 21 million people, is one of the fastest-growing markets globally for Airbnb, the travel and accommodation startup. Alongside African counterparts in Ghana and Mozambique, Nigeria, largely thanks to Lagos, was ranked among Airbnb’s eight fastest growing markets globally last year.

That growth trajectory is reflected in the growing supply of Airbnb listings in the city, as data from vacation rental data firm AirDNA shows. Between May 2018 and May 2019, available Airbnb listings in Lagos have nearly doubled.

The booming demand and supply suggests “increasing numbers of travelers are choosing a short-term rental instead of booking traditional accommodation such as a hotel,” says Scott Shatford, chief executive of AirDNA. “You can see this in the particularly large rise in the supply and demand of private rooms. This could be an indicator of a lag in hotel construction—and Airbnb is taking [up] the slack,” he says.

The theory of a hotel deficit applies to several urban centers across Africa which are still regarded as high-growth markets for hotels. As such, some of the world’s largest hotel chains  are betting big on billion-dollar expansion plans in African cities over the next decade. But in the meantime, savvy Lagos home owners supplying Airbnb rentals are translating that gap into income: over the past year, revenue per available rental has risen 40%, AirDNA data shows.

A mixed bag of tenants

So who’s the Airbnb customer in Lagos?

Even though there’s no solid tourism data available, industry insiders speculate Lagos welcomes more business travelers than it does holidaying tourists. “Tourism statistics for Nigeria are not as segmented as we’ll like them to be,” admits Funmi Oyatogun, travel blogger and founder of TVP Adventures, an Africa-focused tourism company.

But using her company’s bookings as sample data, Oyatogun suggests there’s a trend. “We get some tourists who are tracing their African roots or exploring the arts and culture scene but the majority of inbound bookings we get are people who are here for work, conferences or events and want to do some touring on the side,” she says.

In addition to the vast crop of business travelers, a growing local culture for vacationing within rather than outside Nigeria, may also be a factor, Oyatogun says. There’s already growing evidence that young Nigerians are increasingly opting for local travel options, or “staycations” as millennials also call them.

Another important market that appears to be driving Airbnb bookings in Lagos: the large number of Nigerians who live abroad who return home for holidays during the festive season. “That market deserves its own numbers because they may be skewing inbound tourism data,” Oyatogun says.

Data also supports that theory as a comparison of the rate of bookings year round, suggests “high seasonality in Lagos” with occupancy peaking between August and December, Shatford says.

Folarin Odunayo, a Toronto-based Nigerian who frequently returns home for holidays and only stays in local Airbnbs attributes the startup’s seeming popularity among diaspora Nigerians to familiarity and seeking better value for money.

Source: Quartz Africa