E-commerce to boost hospitality profits by 2017

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Following the exponential growth recorded in Nigeria’s e-commerce space, higher annual fiscal yields accrued from the hospitality sector are expected to rise by the year 2017.

Based on industry reports, the nation’s online trade sector continues to experience robust developments on the back of increased internet access and improved mobile connectivity with about 500,000 online orders placed daily.

As the Federal Government targets the transformation of key sectors of the economy under the new broadband regime, pundits expect this move to enhance e-transactions thereby raising the hospitality sector’s capacity to contribute efficiently percent to Gross Domestic Product.
As announced by the Nigerian Communications Commission (NCC), active internet subscription in Q3 2014 stood at 73.9 million. This represents a penetration of 43 per cent in the same quarter – this trend is expected to peak  84.3million users in two years.

On the backdrop of this development, MainOne, Nigeria’s world class submarine cable system, in partnership with the federal government has begun running state of the art IP NGN lines down the coast of West Africa with regional and metro terrestrial fiber optic networks, and data center facilities as well in a bid to grow and equip players with broadband solutions.

According to the plan, easing up the 2.3GHz licensing processes, which is expected to offer higher speed services for subscribers, will expand traffic and enable start-up’s in the travel group drive purchase on product offerings via cyber space.

With online businesses having the potential of contributing over $500million to Nigeria economy annually, stakeholders in this industry are set to take advantage of the opportunities that arise.

Speaking on this development, Marek Zmyslowski, managing director Jumia Travel Nigeria said, “E-commerce is the future of business and Nigeria being one of the fastest growing economies in the world has the market size and talent pool to develop this space. As focus in this area grows, we find the hospitality industry will follow this upward trend. This is something we are optimistic about”

Highlighting projections for the sector, analysts at FBN Capital said, “The impact of getting the travel and tours industry on the grid will yield deeper impressions on local sector operators with higher earnings accrued than the previous fiscal year.”

A survey carried out by the group found that 92 per cent of Nigerians who booked hotel and other services online were satisfied with the speed of the booking experience. However, according to the FBN report, 78 per cent of users expressed cyber security concerns; a leading global concern issue.

As the CBN continues to enforce the adoption of the two-factor authentication system, analysts expect matters surrounding online safety to be made top government priority.

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