Authors: Nurudeen Akinsola Bello Adekoyejo Babatunde Jolaoso Olusegun Olaopin Olanrele
Investment in real estate extends beyond property use on annual tenancy or short leases basis, but also includes the provision of accommodation with varied renting patterns such as short let and time share. Generally, hospitality industry comprises of commercial and non-commercial activities and services; it is an investment that is housed in a real estate asset that renders services in trade form. Technically, hotel investment is one of the breeds of real estate investment, but practically considered more as a part of the breed of pure business investment. This empirical work therefore highlighted and compared the attributes of hotel investment and commercial property investment measuring their performance through occupancy rate analysis. From a sample of 177 commercial properties and 70 hotel properties in the Central Business Districts (CBD) of Ikeja, Abeokuta, Ibadan, Osogbo, Akure and Ado-Ekiti; adopting a questionnaire survey on investment managers of these two property investment options. The research findings revealed that commercial and hotel properties have similarity in 4 of the qualitative variables and different in the remaining 8 variables. The study further revealed no significant difference in the occupancy rate of commercial property (0.89) and the hotel property (0.80) as reflected by the Kolmogorov Smirnof (K/S) two sample tests. Although this seemed to be the first comparative study of direct commercial property and direct hotel property investment attributes in Nigeria, it is concluded that hotel property could be a more attractive and better investment as revealed by the short-term advance payment attribute and its dynamic response to economic situation than the commercial property. It is recommended that subsequent study should extend to investment characteristics through trend analysis of return on these investments.