Position Paper by Hotel Human Capital Strategy on the National Institute for Hospitality and Tourism (NIHOTOUR) Regulations, 2025

Position Paper by Hotel Human Capital Strategy on the National Institute for Hospitality and Tourism (NIHOTOUR) Regulations, 2025

Executive Summary

The Nigerian hospitality and tourism industry is a vital driver of economic growth, job creation, and global visibility for the country. While the NIHOTOUR Regulations, 2025 seek to standardize, train, certifify the industry, several provisions present significant concerns. The mandatory certification of all personnel, high levies and fees, and overlapping regulatory controls risk undermining business sustainability, discouraging investment, and conflicting with the Federal Government’s agenda of reducing multiple taxation. This position paper outlines the key concerns and offers recommendations for a balanced reform approach.

1. Introduction

Hospitality, travel, and tourism collectively employ millions of Nigerians and serve as a cornerstone of the non-oil economy. As a leading management and human capital development company, Hotel Human Capital Strategy Ltd (HHC) has been at the forefront of training, capacity building, and operational support for hotels and tourism enterprises across Nigeria. We strongly support credible efforts to grow the tourism sector. However, such strides must be inclusive, sustainable, and aligned with the broader economic direction of the private sector and enabled by the  government and other stakeholders.

2. Key Concerns with the NIHOTOUR Regulations, 2025

A. Registration and Certification of Personnel

The requirement that all personnel (including front desk officers, housekeepers, waiters, and cleaners) must obtain NIHOTOUR certification and annual renewals is impractical and financially burdensome. High staff turnover in the industry means operators will struggle to continuously sponsor employees for certification, leading to increased informality and reduced job opportunities.

B. Excessive Levies and Fees

The fee structure is prohibitively high, especially for SMEs:

Operators: ₦420,000 – ₦1.33 million annually (Nigerians) and ₦710,000 – ₦1.8 million (foreigners).

Managers: ₦350,000 (Nigerians), ₦610,000 (foreigners).

Supervisors: ₦280,000 (Nigerians), ₦455,000 (foreigners).

Craft-level/entry staff: ₦90,000 (Nigerians), ₦182,000 (foreigners).

(Above is based on NIHOTOUR’s Regulation June 2025 as Gazetted and signed by the DG)

The guidelines say NIHOTOUR’s may also impose percentage levies on gross revenues of operators (NIHOTOUR Regulation June 2025 as Gazetted). This represents an additional tax burden on top of existing obligations such as Company Income Tax, VAT, PAYE, pensions, and state tourism levies.

C. Conflict with Federal Tax Policy

The Federal Government has consistently pledged to reduce multiple taxation and improve Nigeria’s ease of doing business ranking. For instance the Federal Government’s tax policy of ₦70,000 is yet to be fully implemented yet NIHOTOUR’S June 2025 regulation is enforcing waiters, waitresses, artisans to register with ₦90,000 to ₦280,000. This requirement is impractical, as most frontline hospitality workers earn less than ₦50,000 per month — far below the proposed fees of ₦90,000–₦280,000.

Additionally, the Federal Government’s tax policy has exempted certain personnel and indeed SMEs from paying tax including those earning equivalent of ₦800,000/PA.

Indeed, NIHOTOUR’s levies and approvals duplicate the roles of other regulatory agencies such as CAC, FIRS, State Tourism Boards, and PenCom, creating confusion and discouraging investment.

D. Enforcement and Governance Provisions

The Regulations grant NIHOTOUR broad powers to:

1). Approve/reject directors, CEOs, and management firms before appointment. (NIHOTOUR Regulation June 2025 as Gazetted)

2). Control mergers, acquisitions, and even rebranding of hospitality businesses (NIHOTOUR Regulation June 2025 as Gazetted)

3) Suspend/revoke licenses, seal premises, and prosecute operators via its Tribunal (NIHOTOUR Regulation June 2025 as Gazetted)

While compliance is important, such provisions risk over-centralization, bureaucratic bottlenecks, and potential misuse of power, which could erode investor confidence. The Federal Palace Lagos experience is a good example. Already eroding investor confidence in an operating environment that is highly toxic, economically unstable amongst other challenges. 

3. Implications for the Industry

It is important to state at this point that the hospitality sector contributes immensely to the GDP of nation, helps to reduce unemployment across local and subnational governments, attracts huge FDI, as well as support local abd international trade. Beyond these, hospitality is a human angle business that provides services to many customers. Implementing the current NIHOTOUR act will lead to:

1). Rising Operational Costs: Mandatory annual payments and levies will significantly raise the cost of doing business.

2). Job Insecurity: SMEs within the hospitality ecosystem targeted by this NIHOTOUR 2022 act will cut down hiring or avoid formalizing workers to escape certification costs.

3). Investment Deterrence: Heavy-handed regulation and financial levies may discourage both domestic and foreign investors.

4).Reduced Competitiveness: Nigerian hospitality operators may become less competitive compared to regional counterparts where regulatory costs are lower and frameworks are more business-friendly.

International experience also offers valuable lessons. For example, in the UK (Wednesday August 27th) Daily Express published an exclusive by Chief Reporter, Giles Sheldrick, with headline- 'A tsunami wave after wave’ … 100,000 jobs ‘will be lost in hospitality by next Budget.’

This recent developments in the United Kingdom offer a cautionary tale. According to UKHospitality, more than 55,000 pubs have already closed permanently, with over 165,000 jobs lost, and industry leaders warn that an additional 100,000 jobs could disappear by the next budget if tax burdens are not eased. They describe the wave of new levies as a “tsunami wave after wave,” pointing out that increases in business rates, VAT, corporation tax, and payroll costs have made operations unsustainable.

Importantly, UKHospitality stresses that hospitality is “the heartbeat of communities,” central to social life, celebrations, and local economies. Nigeria must learn from this experience: imposing multiple, overlapping levies and mandatory certifications through the NIHOTOUR Regulations risks similar consequences — widespread job losses, business closures, and damage to the social fabric of communities that depend on hospitality for employment and cohesion.

At this point, a little bit of comparative industry perspective will help. Across professional sectors in Nigeria, annual registration and practice fees are modest and aligned with economic realities. For example, the Nigerian Bar Association (NBA) requires between ₦5,000 and ₦25,000 annually for lawyers, with even Senior Advocates of Nigeria paying ₦50,000. Similarly, the Nigerian Institute of Architects (NIA) charges up to ₦30,000 depending on membership level. For the Pharmacy Council of Nigeria (PCN) exempts professionals with 40 years post graduation or 65 years old from paying annual dues. 

In stark contrast, the NIHOTOUR Regulations prescribe registration fees of ₦90,000–₦350,000 for individual hospitality staff and up to ₦1.33 million for Nigerian operators (₦1.8 million for foreign operators). This disparity highlights how the hospitality industry is being subjected to disproportionately higher regulatory costs compared to other respected professional bodies, a policy stance that undermines competitiveness and discourages sustainable growth.

4). Recommendations

1. If NIHOTOUR must register, then it should begin a phased Implementation starting with free registration of managers and supervisors, then gradually extend certification to frontline staff over 3–5 years.

2. NIHOTOUR should allign with Federal Tax Policy by Consolidating NIHOTOUR levies with existing federal and state taxes to prevent duplication and double taxation.

3. The Federal Ministry of Art, Culture, Tourism and Creative Economy should establish a Hospitality & Tourism Regulatory Council with NIHOTOUR, FTAN, ATHCON, NHCI, ITPN,etc to co-develop practical standards. It is important to state at this point that only Professionals can regulate the industry, hence Professionals should take chare of regulating itself, with guidance under government policies. 

4. NIHOTOUR should focus on Capacity-Building over Policing. The industry needs training hence emphasis on training, skills development, and staff welfare rather than punitive enforcement.

5. Finally, we call for the NIHOTOUR act to be reviewed so as to clearly define and limit NIHOTOUR’s powers over regulations including: registrations, board appointments, mergers, acquisitions, and rebranding to safeguard industry growth. NIHOTOUR as an institute cannot regulate and should be discouraged from doing so.

5). Conclusion

NIHOTOUR was conceived to strengthen Nigeria’s hospitality and tourism industry by addressing critical skills gaps and fostering professional excellence. We fully support this core mandate. However, the current approach which emphasizes mandatory certification of all categories of staff, imposes high levies, and centralizes regulatory powers, risks stifling investment, discouraging job creation, and contradicting the Federal Government’s commitment to reducing multiple taxation and enhancing the ease of doing business.

We urge NIHOTOUR to concentrate on its foundational purpose: building capacity and closing the skills gap within the industry. If properly implemented, this focus will naturally lead to improved service standards and sustainable growth. 

We therefore call on NIHOTOUR, the Federal Ministry of Arts, Culture, Tourism and Creative Economy, and key industry stakeholders to urgently review and amend the Regulations in order to create a balanced, sustainable, and business-friendly framework that promotes excellence without crippling the industry. The tourism industry must be strengthened in fair and economically viable approaches without imposing unsustainable financial burdens.

Chibuikem Diala MIH MITPN 

Hotel Human Capital Strategy Ltd

Management Consultants & Hospitality Training Specialists (Organisers of IHTEF Hospitality Summit)

hotelhumancapital@gmail.com