Published on and written by Cyril Jarnias
Nigeria finds itself at the intersection of two powerful dynamics: the rise of tourism – beach, cultural, business, religious, and event-based – and the explosion of an already strained real estate market. Between Lagos, the coastal corridors towards Calabar, historic cities like Ile-Ife or Kano, cultural sites, and private beach resorts, tourism is profoundly altering the way land is valued, developed, rented, and financed. Behind the growth figures, a more nuanced reality emerges: wealth and job creation, but also skyrocketing rents, pressure on resident housing, land-use conflicts, pollution, and speculation.
Tourism has become a central driver of the Nigerian real estate market, according to academic studies and reports. However, this growth is giving rise to new risks. For tourism to be a sustainable lever for development and not a factor in a housing crisis, these risks must be managed by public policies.
An Expanding Tourism Sector Carrying Increasing Weight in the Economy
Nigerian tourism is not starting from scratch. The country possesses a rare combination of beaches, mangroves, forests, mountains, wildlife, historic cities, spiritual sites, and major cultural events. Places like Yankari Game Reserve, Cross River National Park, Obudu Cattle Ranch, Aso Rock, Olumo Rock, Erin Ijesha Waterfalls, Ikogosi Warm Spring, and UNESCO World Heritage Sites like the Osun-Osogbo Sacred Grove and Sukur Cultural Landscape outline a widely recognized tourism potential. To these are added festivals with strong international appeal, such as the Calabar Carnival, Argungu Fishing Festival, Eyo Festival, or Ojude-Oba.
Tourism’s contribution to Nigeria’s GDP is projected to reach nearly ₦12.3 trillion by 2032, according to WTTC projections.
Arrivals of international tourists follow the same long-term upward trajectory, despite fluctuations. After 1.3 million visitors in 2016, Nigeria reached about 2 million arrivals in 2019, before the collapse due to COVID-19, and then a rebound estimated at 6.1 million in 2022. Forecasts project 6.7 million visitors in 2026, with demand growing by nearly 3% per year since the early 2000s.
In 2016, 97% of travel spending in Nigeria was of domestic origin, demonstrating the overwhelming weight of the domestic market.
In this context, the federal government has listed tourism among the strategic sectors to diversify the economy away from oil. The new National Tourism Policy (2024–2030) explicitly aims to make the country a sustainable tourism destination and increase the contribution of tourism and hospitality to 12% of GDP by 2031. It promotes a wide range of products: cultural and heritage tourism, MICE (Meetings, Incentives, Conferences, and Exhibitions), sports tourism, eco-tourism, medical tourism, coastal tourism, diaspora tourism, religious tourism, and rural and community tourism.
Inevitably, this growing influence is reflected in the real estate sector, which must absorb, accommodate—and sometimes endure—the effects of this new demand.
Lagos, a Full-Scale Laboratory for the Link Between Tourism and Real Estate
Lagos stands out as the most illuminating observation ground for understanding tourism’s impact on the real estate market in Nigeria. The nerve center of business and the non-oil economy, the megacity concentrates nearly 60% of the country’s non-oil economy and hosts four of the eight national seaports. It ranks among the most visited cities in Africa, driven by its beaches (Bar Beach, Tarkwa Bay, Elegushi, Eleko, Whispering Palm), natural attractions (Lekki Conservation Centre), memorial sites (Badagry Slave Chain, Tinubu Square, museums), and its cultural and entertainment scene, especially during the famous festive season known as “Detty December.”
The rise of tourism is particularly visible in three real estate sub-segments: hospitality, short-term rentals or “short-lets”, and residential and mixed-use developments along new infrastructure corridors.
The Direct Relationship Between Tourist Arrivals and Revenue in Lagos
A study conducted over 22 years in Lagos (2000–2021) highlighted, via a linear regression model, a strong relationship between the number of tourists and the revenue generated by the sector. The model used, of the form:
> Revenue = 8.2312 + 0.8358 × (Number of Tourists)
shows that one additional unit of visitors translates on average into a 0.8358 unit increase in revenue. With an R² of 0.749, nearly 75% of the variation in tourism revenue is explained by visitor flows. Over the studied period, Lagos recorded an average of over 1.3 million tourists per year for average annual revenue of approximately $665.1 million.
The peaks in tourist influx in Davos illustrate the sensitivity of the local economy to international events. For instance, hosting the World Economic Forum in 2014 boosted arrivals to 4.8 million people. Similarly, tourism revenue peaked in 2017 at $2.62 billion. These revenues translate concretely in the city through the construction of new hotels, the expansion of existing establishments, and the proliferation of serviced apartments and luxury residences aimed at business and leisure clientele.
Hospitality: A Project Pipeline Reshaping Neighborhoods
Nigeria now has the second largest hotel pipeline in Africa, behind Egypt. In early 2024, 50 hotels comprising 7,622 rooms were in the project or construction phase, with a significant portion in Lagos. In 2023, nine new hotel development agreements were signed in the country, including five in Lagos, with the presence of major international chains (Hilton, Radisson, Marriott, Leva Hotels, Accor, IHG, etc.) as well as powerful local operators like Transcorp Hotels, Eko Hotels & Suites, or the Chagoury Group.
This development translates into a clear improvement in performance: occupancy rates, which fell below 30% at the height of the pandemic, recovered to nearly 70% in 2022, with peaks of 70–80% in international hotels. In Lagos, RevPAR (Revenue per Available Room) exceeded its 2019 level by 43%, while average nightly rates increased by over 35% in 2023, reaching about $140 on average nationally in 2018, and well beyond in Lagos’s premium segments.
This dynamic is driving the specialization of certain neighborhoods: Victoria Island and Ikoyi concentrate high-end and even luxury hotel stock, while Ikeja (around the airport) and hubs like Lekki or Ajah attract more mid-scale or budget hotels. These investments reinforce the land value of the concerned areas, as well as pressure on available land, often to the detriment of affordability for local households.
Short-lets and Digital Platforms: A New Real Estate Frontier
Where the impact of tourism on real estate is most spectacular—and most controversial—is in the area of short-term rentals, largely driven by digital platforms like Airbnb. In Lagos, this short-let market has experienced explosive growth. A specialized report on the “Lagos Short-let Market 2024” listed over 5,800 listings, and other analyses estimate the segment’s revenue at approximately ₦264.3 billion in 2024, with a projection of ₦300 billion in 2025.
In some areas of Lagos, prices for short-let apartments increased by over 200% in 2024.
| Lagos Neighborhood | Estimated Increase in Short-let Prices in 2024 |
|---|---|
| Ikoyi | ≈ +60% |
| Lekki Phase 1 | Significant increase, slightly below Ikoyi |
| Surulere | ≈ +30% |
| Ikeja | ≈ +42% |
| Magodo | > +50% |
| Ajah, Yaba | Strong growth, close to Magodo |
| Victoria Island | Moderate increase |
| Ikate, Gbagada | More contained progression |
These spectacular increases are explained by several combined factors: general inflation, soaring construction costs, rising operating expenses (energy, security, maintenance), but above all, the higher profitability of short-term rentals compared to traditional annual leases. In sought-after neighborhoods, gross yields on short-lets can reach 10 to 20% per year, where traditional residential leases often cap around 4 to 6%.
Ultra-flexible, furnished, connected, and often equipped with hotel-inspired services (cleaning, security, remote management), these properties attract a varied clientele: international tourists, visiting Nigerians from the diaspora, business travelers, temporary workers on assignment, but also urban middle classes for festive or family stays. Daily rates can range around ₦50,000 to ₦100,000 for a one-bedroom apartment, and climb well beyond for larger or better-located units.
Diversion of Housing Stock and Affordability Crisis
This exceptional profitability has a downside: pressure on the long-term residential housing market. Many owners now choose to convert their apartments or houses into short-lets rather than renting them out annually. Documented cases show that some landlords do not hesitate to not renew leases, or even evict households, to quickly refurbish and reposition their property on short-term rental platforms.
In a context of a 3 million housing deficit and skyrocketing prices (average >₦200M), converting properties to short-term rentals reduces the rental stock. Annual rents in central neighborhoods (Ikoyi, VI, Lekki) reach several million for a 2-bedroom, and up to $5,000/month for a 4-bedroom villa, offering higher yields in short-term.
The social consequences are tangible: increased difficulties for families and young professionals to find stable housing, displacement to cheaper peripheries, longer commute times, social fragmentation between “touristified” neighborhoods and the rest of the city. Real estate professionals now speak of short-term rentals as a “disruptive” force that removes units from the residential market and erodes the stock of affordable housing.
At the same time, the absence of a clear regulatory framework leaves this segment in a gray area: poorly applied taxation, uneven safety standards, nuisance for neighbors (noise, parking, parties), and unstructured competition with traditional hospitality. Several experts are therefore calling for balanced regulation: mandatory registration, zoning rules, potential caps per neighborhood, minimum safety and quality standards, without stifling innovation or value creation.
Beach Tourism and Coastal Area Valuation: The Case of Elegushi and the Lagos-Calabar Corridor
Beyond the Lagos megalopolis, the entire Nigerian coastline is being reshaped by the effects of tourism and major infrastructure projects. Two examples illustrate the scale: the private Elegushi beach in Lekki, and the vast coastal highway project linking Lagos to Calabar.
Elegushi: A Private Beach as a Local Engine for a Real Estate Micro-Economy
Elegushi Beach, located in Lekki and owned by the Elegushi royal family, illustrates the economic potential of a well-managed beach site. Qualitative studies conducted on-site, through interviews and observations, show that tourism is the dominant economic activity there. Visitors aged 31 to 50 constitute the most represented age group, with a peak in attendance in December, the high season for domestic and international tourism.
On the site, restaurants are the main employer, followed by bars, clubs, leisure providers, and various services. Revenue from access tolls comes mostly from domestic visitors, while surrounding hotels derive a larger share of their revenue from foreign tourists. A profitability analysis concluded that beach tourism at Elegushi was profitable at about 64.5%, with a proven potential for generating tax revenue for the state and creating local jobs.
This attractiveness is not without effects on the surrounding real estate. Demand for short-term accommodation (hotels, serviced apartments, short-lets) is exploding nearby, leading to increased rents and price per square meter in the Lekki–Oniru–Victoria Island corridor. Investors mobilize these tourism revenue prospects to justify high-end residential projects or mixed-use complexes, which cater more to a solvent clientele than to historical residents.
Qualitative studies reveal several negative impacts: significant immigration of workers and entrepreneurs from other regions, tensions over the use of public spaces, pollution problems, and relative marginalization of less-educated local populations. The latter struggle to access the best business opportunities, often captured by outside actors.
The Lagos-Calabar Coastal Highway: An Infrastructure Project Reshuffling Land Cards
The Lagos-Calabar Coastal Highway project, over 700 km long, is probably the most structuring medium-term impact factor on the tourism-real estate duo in Nigeria. By connecting Lagos to Calabar along the coast, crossing states like Ogun, Ondo, Delta, Bayelsa, Rivers, Akwa Ibom, and Cross River, this infrastructure promises to disrupt land values, the accessibility of tourist sites, and urbanization dynamics.
The construction of the coastal highway is expected to lead to the release of new land for development and an increase in land prices nearby. It will attract developers to build housing estates, logistics parks, shopping centers, as well as tourism infrastructure (resorts, eco-lodges, marinas). Localities like Ibeju-Lekki will benefit from a spillover effect, while states like Ondo or Delta are attracting investor interest for their more affordable land.
The following table summarizes some of the expectations around this project for the real estate and tourism market along the corridor.
| Expected Effect of the Lagos-Calabar Highway | Anticipated Impacts on Real Estate and Tourism |
|---|---|
| Improved Connectivity | Increase in land and property values |
| Opening up of Coastal Areas | Development of residences, industrial zones, logistics parks |
| Coastal Valuation | Proliferation of resorts, hotels, short-lets, second homes |
| Relative Decongestion of Lagos | Growth of medium-sized coastal towns, new economic hubs |
| Better Accessibility of Tourist Sites (e.g., Obudu Mountain Resort via Cross River) | Increase in hotel and leisure investments, diversification of tourism offerings |
This type of infrastructure is part of a broader trend of development corridors in Nigeria: from the Sokoto-Badagry Highway to the Second Niger Bridge, to the modernization of the Lagos-Ibadan Expressway and the development of railway axes. These projects typically lead to an accelerated appreciation of 18 to 35% in land values in the served areas.
But the challenges match the promises: land speculation, expropriations, land acquisition disputes, environmental risks (erosion, destruction of marine and coastal habitats, deforestation), and the need for long-term maintenance of the infrastructure. Without clear mechanisms for compensation, inclusive planning, and environmental protection, the project could worsen inequalities in access to the coast and threaten fragile ecosystems in favor of poorly managed urbanization.
Cultural Heritage, Tourism, and Property Value: An Ambivalent Impact
Beyond beaches and highways, Nigerian tourism also relies on a dense fabric of cultural and historical sites: ancient cities like Ile-Ife or Kano, museums, traditional palaces, sacred caves, cultural landscapes, and declared monuments. These places do not only have a symbolic or identity dimension; they also influence real estate values, sometimes in unexpected directions.
Ile-Ife: Proximity to Heritage and Rental Value
A study published in the International Journal of Real Estate Studies analyzed 223 residential buildings around two heritage sites in Ile-Ife, also interviewing real estate practitioners. The main result is surprising: as one moves away from the cultural sites, the average rental value of housing increases, whether in the historic core or in peripheral neighborhoods.
In other words, immediate, excessive proximity to certain heritage sites seems to weigh negatively on rents, likely due to perceived nuisances (crowds, ceremonies, noise, traffic, lack of urban modernization, cultural prohibitions). Housing in suburban areas, better planned and more modern, attracts higher rents, even though they are farther from tourist and historical centers.
To enhance a tourist site, investors must analyze the overall urban context (roads, services, security, mixed-use) and not focus solely on the site. Public authorities, for their part, must integrate heritage tourism into urban planning to preserve residents’ quality of life and avoid rejection of tourist activities.
Kano, Old Oyo, Badagry: Regeneration, Opportunities, and Risks of Gentrification
In other cities, like Kano or the Old Oyo National Park area, heritage tourism plays a driving role in urban regeneration. Around Kano’s ancient walls or monuments like Gidan Makama, rehabilitation projects have stimulated the local economy, job creation, and the emergence of small businesses (guides, artisans, shops). But sometimes overly modern reconstructions threaten the authenticity of sites, raising questions about the quality of heritage enhancement.
The example of the Fez medina shows that massive investments in heritage renovation, although job-creating (over 10,000), can lead to strong gentrification. Between 2004 and 2014, the resident population fell by over 25%, with modest inhabitants selling their properties at high prices. This dynamic calls for preventive thinking for similar projects, for example in Badagry or around museums in Benin City, Nigeria.
Legal Framework and Heritage Governance
The protection of Nigerian heritage rests on the National Commission for Museums and Monuments (NCMM) and the corresponding law, complemented by urban planning law. But several analyses highlight weak sanctions and a lack of coordination between planning institutions and heritage stakeholders. For example, a maximum fine of a few thousand naira for destroying a listed site remains a deterrent only on paper.
Yet good heritage governance is essential for cultural tourism to also serve as a lever for sustainable real estate. By strengthening protections, creating special conservation zones, integrating local communities into site enhancement, and supporting the rehabilitation of old buildings into hotels, guesthouses, or cultural spaces, it becomes possible to generate real estate income without displacing residents or distorting the identity of places.
When Tourism Accelerates Structural Trends in the Real Estate Market
Nigeria faces a colossal housing shortage, estimated between 20 and 28 million units, in a context of rapid demographic growth (population projected at nearly 260 million inhabitants by mid-decade). Urbanization is accelerating, with megacities like Lagos, Abuja, or Port Harcourt growing by hundreds of thousands of additional inhabitants each year. In this framework, tourism superimposes additional demand – often with relatively high purchasing power – on an already tight market.
Market Fragmentation Between Tourism, Middle Classes, and Vulnerable Populations
In practice, several sub-markets coexist and overlap:
Overview of the different segments of the residential and tourism real estate market in Nigeria, characterized by distinct dynamics and players.
Concentrated in specific zones like Lekki, Victoria Island, Ikoyi, Ikeja, Calabar, Obudu, and Badagry. It includes hotels, resorts, serviced apartments, and short-term rentals (short-lets).
Targeting expatriates, local elites, and diaspora investors. Rents are sometimes dollar-denominated in the most prestigious neighborhoods.
Intended for urban middle classes, torn between homeownership aspirations and prohibitive prices. They turn to peripheries or innovative formats like co-living, micro-apartments, and ‘build-to-rent’.
Concerns a large part of the population, living in under-equipped and vulnerable neighborhoods, often far from tourism hubs but impacted by the general rise in costs.
Tourism, by channeling foreign exchange revenue, significant spending in hospitality, and strong demand for short-lets, contributes to reinforcing the perception of real estate as a safe haven and an investment asset. Many Nigerians in the diaspora, encouraged by record remittances (over $20 billion in some years), now prioritize income-generating assets: short-let apartments, gated estates, luxury residences in Lagos and Abuja, land in new infrastructure corridors.
This phenomenon further increases competition for well-located properties, especially in tourist neighborhoods or those with high appreciation potential. Real estate fractional ownership platforms, which allow buying a share of a property to receive a fraction of the rents (including tourism-related), are also developing, widening the circle of investors.
Growth of Secondary Cities and Tourist Corridors as New Real Estate Hubs
The impact of tourism is not limited to economic capitals. As infrastructure expands, new towns and corridors emerge as “hot spots” for real estate investment backed by tourism and leisure. This is the case, for example:
Main corridors and cities offering real estate development opportunities, driven by specific economic, tourism, and infrastructure factors.
Driven by the deep-sea port, free trade zone, future coastal development towards Calabar, and beach resorts.
Proximity to Obudu Mountain Resort and ecotourism sites, potentially becoming bases for resorts, hotels, and tourist residences.
Combination of industrial, port activities, and growing business hospitality, creating a market for serviced apartments and mid-scale hotels.
Driven by cultural, religious, or business tourism, offering targeted opportunities.
In these contexts, the boundary between tourist real estate and residential real estate often blurs. A single project can combine apartments for long-term rental, furnished units for short-lets, coworking spaces, shops, conference rooms, and sometimes leisure facilities (pools, golf courses, marinas, clubs). Real estate becomes the material support for a service economy aimed at a hybrid audience: tourists, expatriates, mobile workers, visiting diaspora, but also permanent residents.
Public Policies, Regulation, and Balancing Tourism Appeal with the Right to Housing
Facing these dynamics, Nigerian public authorities are engaged in a race against time: leveraging the enormous tourism potential to diversify the economy and create jobs, while avoiding this same dynamic from deepening housing access inequalities and degrading natural and cultural environments.
National Strategies: Tourism as a Development Pillar, but Vigilance on Real Estate Effects
The new National Tourism Policy places at the heart of its approach the development of infrastructure (roads, airports, transport hubs, maritime routes), improving connectivity, and mobilizing private investment, notably via public-private partnerships (PPPs) and the creation of a Tourism Development Fund. It also emphasizes the need to involve local communities in the tourism value chain, to prevent revenues from concentrating in the hands of a few major operators.
The state considers tourism as a lever to make infrastructure profitable, secure investments, and stimulate construction (hotels, convention centers, cultural facilities, residences). Tax law allows for the deductibility of part of tourism revenues reinvested in the construction or extension of hotels, enhancing the sector’s appeal to developers.
But this strategy must now be articulated with other key policies: reducing the housing deficit, social housing programs (like the “Renewed Hope” projects), the second generation of land reforms (cadastral digitalization, securing titles), and initiatives to regulate rents and advance payments in some states like Lagos.
Regulating Short-Term Rentals and Protecting Residents
In Lagos, where tensions between short-lets and residential housing are most visible, specific regulation of short-term rentals appears increasingly inevitable. Several intervention axes are typically mentioned by experts:
To effectively regulate short-term rentals, several key measures are recommended: mandatory registration of operators with a regulatory authority, like the state real estate regulator; harmonizing taxation (occupancy taxes, income taxes) to prevent unfair competition with the traditional hotel sector; defining zoning rules to limit the density of such rentals in sensitive residential neighborhoods; establishing minimum safety standards, including smoke detectors, evacuation plans, and guest security checks; and implementing mechanisms for resolving disputes with neighbors, particularly regarding noise, parking, and waste management.
These measures would preserve the short-let market’s dynamic of creating value and jobs, while better protecting residents’ interests and neighborhood cohesion. They would fit into a broader movement of professionalizing the real estate sector, already initiated by the creation of regulators like LASRERA in Lagos, or the digitalization of land registries.
Environment, Coast, and Historic Cities: The Red Line Not to Cross
The other major potential fault line concerns the preservation of natural environments – especially coastal – and cultural heritage in the face of the real estate appetite spurred by tourism. Studies on beach tourism internationally show the risks: accelerated coastal erosion, habitat destruction, pollution, massive coastal artificialization, de facto privatization of beaches to the detriment of local communities.
The success of Nigeria’s coastal highway depends on the rigorous implementation of key measures: serious environmental impact assessments, protection of sensitive zones, adoption of eco-friendly construction standards (water management, sustainable materials, emission limits, landscape integration), and guaranteeing public access to beaches and natural resources.
Similarly, the enhancement of historic cities and heritage sites must be done keeping in mind the experience of Fez: transforming an ancient urban fabric into a tourism product must not mechanically translate into the eviction of inhabitants and the ethnicization of space (tourist neighborhoods on one side, a poor belt on the other). Integrating the local population into the structuring of real estate projects (participation, co-ownership, jobs, training) and fine-tuning regulation of acquisitions by foreigners or institutional investors are key conditions for sustainable cultural tourism.
Towards a Nigerian Model of Convergence Between Tourism and Real Estate
At the end of this overview, one conclusion stands out: tourism is no longer a peripheral sector in Nigeria. It is now at the heart of the real estate market’s restructuring, urban planning, and investment strategies, particularly in Lagos and along the coast. It attracts capital, stimulates construction, increases land value, drives the upgrading of certain neighborhoods, and offers new income opportunities for owners, developers, and communities.
The convergence of tourism and real estate in Nigeria presents major risks: worsening the shortage of affordable housing, gentrification of neighborhoods, pressure on infrastructure, environmental degradation, and marginalization of local communities. The balancing act between these forces will determine whether tourism becomes a pillar of equitable development or a factor of social fracture.
A positive “Nigerian model” could take shape around a few concrete axes: regulate without stifling, especially for short-lets; channel a portion of tourism real estate gains towards funding social housing and basic infrastructure; actively protect coastal ecosystems and historical heritage; and place local communities at the center of strategies, not on the margins. In a country where real estate already represents a major share of GDP and where urban youth aspires to both a roof and economic opportunities, the challenge is as simple as it is colossal: to ensure that every new resort, every new hotel, every new tourism corridor is not just a profitable asset on a balance sheet, but a building block of a more inclusive urban future.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
