Analysis of the Impact of Foreign Direct Investment on Hotel Development in Lagos State, South West Nigeria

This study analyses the impact of foreign direct investment on hotel development in Lagos State, South West Nigeria, Nigeria's primary gateway city and economic centre. The entry of international hotel brands through management contracts, franchises, and direct investment has significantly altered the competitive landscape of the Lagos hotel market in recent years. A mixed-method research design is adopted with secondary data sourced from Lagos State Investment Promotion Agency reports and the Nigerian Investment Promotion Commission, supplemented by structured interviews with 10 hotel investment experts and development advisors. Impact dimensions assessed include hotel capacity expansion, quality standard elevation, technology transfer, employment generation, and competitive pressure on domestic operators. Findings reveal that foreign direct investment has contributed substantially to the expansion of upper-upscale hotel supply in Lagos, with international brands accounting for 61 percent of new room supply added between 2019 and 2023. Quality benchmarking effects are also evident, with domestically owned hotels reporting service standard improvements attributed to competitive pressure from international properties. However, concerns about profit repatriation, limited local ownership participation, and the displacement of smaller domestic operators are noted. The study recommends that the Lagos State government negotiate local content requirements in hotel investment agreements and create incentives for joint venture models between foreign investors and Nigerian hospitality entrepreneurs. Keywords: foreign direct investment, hotel development, international brands, Lagos State, hospitality investment