Etim EtimHow could a 163-room government-owned luxury hotel and golf course be running on a loss for all of its 18-year history and nobody was able to fix it? Will a management overhaul and N27 billion makeover save the hotel? The story of Ibom Hotel & Golf Resort typifies government-owned enterprises in Nigeria. Good intentions, bad management, terrible outcomes and desperate rescue plans. The hotel was built by the Victor Attah administration in 2007 and given to the Starwood Group, a reputable international hotel chain, to manage. For the 10 years Starwood was in charge, the hotel was one of the most favourite brands in the country, attracting clients and guests from far and wide. But it was perpetually run on a loss. The state government was even paying the Starwood Group a subvention of N50 million per month.
Starwood did not invest a penny in upgrading the facilities, but they were piling up expenses. ‘’It was a bad agreement that did not favour the state government which is the sole owner of the facility’’, says a senior government official who has access to its books. Gov. Udom Emmanuel got fed up with the Starwood Group and let them go (I should note that the government is also having a bad deal with the Sheraton Group at the Ikot Ekpene facility. An exit strategy is being contemplated). To replace Starwood, the government signed on a new management chain known as ICON Group for Ibom Hotel. It was owned by some Kenyans and Nigerians, but their track record was not renowned. The government knew this and so ICON was placed on one-year probation. It could not deliver; its operating loss growing deeper and deeper. Like Starwood, ICON came with many top executives who were paid dollar-denominated remunerations.
Join our WhatsApp ChannelI wrote two articles in 2022 pointing out the nefarious activities of ICON and why their contract should not be renewed, not minding that my friend was directly involved with them. ICON left in early 2022, and with his tenure coming to an end, Gov. Udom Emmanuel was not keen to enter into another management contract.
For two years, the hotel was then managed by the civil servants at the Ministry of Culture and Tourism until Gov. Umo Eno appointed Charles Udoh as its Managing Director in March 2025. His brief is to perform a surgical operation on the place, turn it around and swing it from 18 years of uninterrupted loss position into profitability. It’s a huge responsibility.
Before the appointment, Charles was a commissioner for about ten years between 2015 and 2024, overseeing Information; Environment and Culture & Tourism portfolios. So, he knew a lot about the hotel and its complicated challenges, but as CEO now, he is expected to work dispassionately to turn it around. The governor has some confidence in him. But there are three main problems. First, the hotel has a total debt of N2 billion, mostly to suppliers, some dating back to the Starwood days. Some of them have even taken the hotel to court to recover their money. Second, operating expenses are too high; with staff costs alone taking over 50% of turnover (There are 263 employees and monthly sales hover between N250 million and N300 million). That’s huge and unsustainable.
‘’The reason staff costs are that big is because there was an agreement between Starwood and the staff union for a 10% yearly increase in emoluments across the different strata of the employees, irrespective of the performance of the business’’
says an insider. So, you have a situation where some front desk staffs, for example, are making close to N800, 000 per month because of the yearly increment. That’s awkward and it can only happen in a government business! No loss-making business in the world pays staff yearly salary increase. There are sililar anomalies at the federal government-owned refineries and AJaokuta Steel Mill. Another cost centre is electricity. Ibom Hotel spends N90 million per month on electricity, and this does not include costs of diesel and generator maintenance. The hotel spends N100 million yearly on car rentals.
Charles Udoh therefore has his job cut out for him. Charles and I have a similar career background. We both worked in various banks in Lagos about the same time, managing their corporate communications portfolio. I was therefore keen to talk to him on how he’s taking on his new assignments. I caught up with him at the hotel on Saturday and he took me on a tour, explaining the governor’s plans and vision. Between now and May next year, the hotel will undergo a comprehensive physical, electrical and mechanical overhaul that would be almost like building a new one. “Every single item of furnishing and furniture, including tiles, beddings, carpets and the walls would be changed’’, he said. Total bill is N27 billion. In addition, 1,500 external solar lights are being installed, and the golf course will become the first course in Nigeria where a game of golf could be played at night! Players will have to pay more. Membership fee for the golf club has been increased from N100, 000 to N1 million, and yearly renewal fee from N50, 000 to N300, 000.
To address the excessive staff costs, new remuneration package is in the offing and excess workforce would be shed. In terms of infrastructure, three new gas-powered turbines would be installed to fix the electricity challenge and chillers are being replaced to improve airconditiong. Other income-generating additives like new and modern night club; Sunday lunch at the Marina; new children playground; outdoor catering; confectionery are also coming. A new subsidiary known as Ibom Hotels Hospitality Academy will be established to train industry personnel. To further save cost and generate revenue, backward integration scheme grow own food crops and raise poultry is being planned with the Ministry of Agriculture. ‘’The whole exercise is aimed at improving the customer experience for which the hotel was once known for’’, he enthused.
Rebuilding Ibom Hotel is part of the vision of Gov. Umo Eno who envisions a bright future for the tourism industry in the state. The government is currently constructing a 5,000-capacity convention centre at the Tropicana Complex and completing the 16-storey hotel next door. There is also The Arise Park, the family-themed leisure and entertainment centre in the heart of Uyo. The challenge would be managing all these investments in a commercially-sustainable manner to create a new economy in the state.
Etim Etim
ETIM ETIM is a journalist, banker and author. He has been a member of the Editorial Board of The Guardian, a Regional Manager in Access Bank and is currently a Columnist in Prime Business Africa, The Cable and Businessday newspapers.
He is also the Chief Executive of Stein Meyer Communications, a major media consultancy and the author of the best-selling book, "Akwa Ibom Heroes: Inside Story of the Fight for Abrogation of Onshore-Offshore Oil Dichotomy" and co-author of another book, "Osinbajo Strides: Defining Moments of an Innovative Leader".
