The short-term rental market commonly known as serviced apartment or short let in Abuja has experienced steady growth, with increasing daily rates and occupancy levels which indicates a promising investment opportunity. Data from AirDNA and Airbtics show key insights into the market’s performance over the past year.
1. Increase in Average Daily Rate (ADR)
According to AirDNA, the average daily rate (ADR) for short let rentals in Abuja has experienced a reasonable increase over the past year. As of the latest data, the ADR stands at $62.30 (approximately ₦98,000 per night).
2. Rising Occupancy Rates and Market Stability
Data from Airbtics indicates that the average occupancy rate for Airbnb listings in Abuja over the past 12 months has reached 35% (approximately 128 nights per year). This marks a 4% increase compared to the previous year. (https://app.airbtics.com/airbnb-data/nigeria/0/abuja,%20nigeria)
There’s still Potential to Boost Occupancy to 50% or even 99%.
While the current occupancy rate is 35%, strategic property owners can increase occupancy levels to 50% or more through targeted marketing and enhanced guest experiences.
Ways to achieve this include:
• Improved marketing strategies, including listing social media promotion, partnerships with travel agencies, Short let agents, and other listing platforms like Jiji, Nigeria Property Center, shortletrentals.com, etc
• Offering unique amenities, such as concierge services, airport pickups, and smart home features.
• Competitive pricing and discounts, especially during off-peak seasons, to maintain steady bookings.
In Abuja’s short let rental market, one-bedroom apartments are currently the most in-demand property type. This preference is driven by various factors, including affordability, suitability for solo travelers, singles, couples and more
Despite the influx of new properties, the supply of short let accommodations is still striving to keep pace with the more demand especially in prime areas like Wuse 2 and Maitama, where high occupancy rates and premium rental prices are common.
There’s still opportunity for investors to develop more short let properties to meet these demands. So, Whether in suburban areas like Lugbe or prime locations like Maitama, short let rentals remain a steady stream of income for property owners. Property owners can partner with hospitality companies to maximise profit on their property.
Analysis of a 1-Bedroom Short-Term Rental in Abuja with hypothetical ₦80,000 per Night with Occupancy Rate of 35% (128 nights per year)
Considering Management & Maintenance Expenses = 30% of revenue
1. Annual Revenue Calculation
Total annual revenue = ₦80,000 × 128
= ₦10,240,000
2. Expense Calculation (30% of Revenue)
Management & Maintenance Costs = 30% of ₦10,240,000
= ₦3,072,000
3. Net Income Calculation
Net income = Total Revenue – Expenses
= ₦10,240,000 – ₦3,072,000
= ₦7,168,000 per year
Takeaways;
1. Annual Profitability: At ₦80,000 per night, a 1-bedroom unit generates a ₦7.17 million net profit per year after expenses.
2. Occupancy Growth Potential: If occupancy increases to 50% (183 nights/year) → Revenue rises to ₦14.64 million, with a net income of ₦10.25 million. Effective marketing, better furnishing, and competitive pricing can push occupancy above 35%.
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