Nigeria’s luxury hospitality business is expanding beyond five-star hotels. Short-let apartments, private members’ clubs, fine-dining restaurants, beach clubs, resorts and exclusive event venues are competing for customers willing to pay for privacy, comfort and premium service. For investors, the attraction lies in the growing range of businesses built around accommodation, dining and leisure.

Lagos offers a useful indication of the money involved. Edala Development’s Lagos Shortlet Market Report 2025 estimates that short-let operators generated ₦281.03bn in revenue in 2025, compared with ₦264.3bn in 2024. The report analysed 6,398 listed units across the city.

The festive season provides another indication of spending in the sector. MO Africa Co.’s report on Detty December 2025 estimates that consumer spending in Lagos reached ₦396.54bn over 55 days. Hospitality and accommodation accounted for ₦175.40bn, followed by entertainment and nightlife at ₦129.55bn.

The business goes beyond hotel rooms

Hotels remain central to luxury hospitality, particularly for business travellers, tourists and customers who want accommodation alongside restaurants, conference facilities, spas and event spaces. However, the market now offers several other ways to serve customers willing to spend on premium experiences.

Short-let apartments have established a place in the accommodation business. They appeal to families, groups of friends, returning Nigerians and business travellers who prefer an entire apartment, more living space or greater privacy. For property owners, they also provide an alternative to conventional long-term rentals, although income depends on occupancy, pricing and the cost of managing each property.

Private members’ clubs and beach clubs operate on a different model. Membership fees, reservations, food, drinks and access to facilities can all contribute to revenue. Fine-dining restaurants sell more than meals; their setting, service, menu and reputation are part of what customers pay for. Resorts and wellness retreats add accommodation, relaxation and recreational activities to the mix.

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This variety means luxury hospitality is no longer limited to owning or operating a large hotel. A property developer can build apartments for short stays, a restaurateur can open an upscale dining space, while another investor can put money into a resort or leisure destination.

Following the money and the customers

The people supporting this market are not all spending for the same reasons. Corporate clients need executive accommodation, meeting spaces and venues for retreats. Affluent Nigerians spend on dining, celebrations and weekend leisure, while diaspora visitors return for holidays, weddings and family gatherings. International visitors also contribute, particularly around business and entertainment events.

MO Africa Co. estimated that 3.6 million people participated in Lagos’ 55-day festive season in 2025. Diaspora visitors accounted for 55 per cent of consumer spending, while food and dining contributed ₦51.2bn.

For hospitality operators, the attraction is that one visitor can generate business for several establishments. Someone who books an apartment may also spend on restaurants, lounges, private events and leisure activities. The challenge is keeping that customer spending beyond December. Corporate bookings, weekend outings, local celebrations and regular dining customers become important when the festive crowds have gone home.

The expensive business of making luxury look effortless

Of course, the experience may look effortless to a guest, but running the business is another matter. A luxury property needs dependable electricity, water, security, trained staff and constant maintenance. Restaurants must manage food costs, while resorts have to maintain facilities that may be far from major commercial centres.

Energy costs can eat into margins, particularly for businesses operating swimming pools, commercial kitchens, refrigeration, laundry facilities and large event spaces. Exchange-rate movements also affect operators importing furniture, kitchen equipment, linens, food ingredients and other supplies. Developers face high construction costs and expensive financing before their properties even begin generating revenue.

Competition adds another layer of pressure. The impressive revenue recorded in the short-let market does not mean every apartment owner is making money. More listings mean customers have more options, and operators must work harder to maintain occupancy. A beautiful apartment with unreliable power or an unresponsive host can lose repeat customers very quickly.

There is also an opportunity beyond Lagos. Destinations such as Obudu and Calabar offer room for resorts, nature retreats and other premium leisure businesses. However, investors must consider accessibility, security, infrastructure and whether visitors have enough activities to justify the journey.

Meiza Nigeria