Owning a shortlet in Lagos is no longer enough. As more
apartments enter the market, operators are being forced to compete
harder for guests, control costs and build stronger brands.
That was the message from Temidayo Oloyede, Co-founder and CEO of Edala Development, during a question-and-answer session at the company’s Investor’s Summit 2.0 in Lagos on Saturday.
Oloyede said increasing supply would not necessarily hurt every
operator equally. In his view, the businesses most likely to withstand
tougher competition will be those with strong management, multiple properties, disciplined cost structures and aggressive marketing.
More Apartments, More Competition
Lagos has seen growing interest in short-term rentals, with property
owners and developers increasingly converting or building units
specifically for the shortlet market.
But more supply means guests have more options.
That can put pressure on occupancy, nightly rates and
revenue—particularly for operators whose properties offer little to
distinguish them from competing apartments.
Oloyede argued that management quality could become a major differentiator.
Two apartments in the same neighbourhood may target the same
customers, he said, yet produce very different results depending on how
effectively they are managed.
Scale Could Become an Advantage
Oloyede also believes operators managing several properties may be better positioned to absorb the effects of a market slowdown.
A portfolio can spread certain operating costs and reduce the impact of weaker performance at an individual property.
His strategy also includes spending heavily on customer acquisition.
Where multiple shortlets compete in the same neighbourhood, he said,
operators will need to ensure their properties remain highly visible to
potential guests.
Marketing, including influencer campaigns, could therefore become an increasingly important competitive tool.
The objective is not simply to have an apartment available.
It is to make that apartment one of the properties customers actively consider when they are ready to book.
Occupancy Peaks Around December
Edala’s Chief Operating Officer and Co-founder, Samuel Olatunde, said occupancy across the company’s properties ranges from roughly 59% at the lower end to about 80% during peak periods.
He identified December through February as a particularly strong period for demand.
However, operating a shortlet business is not attractive to every property owner.
Olatunde said some investors ultimately prefer to sell their units
rather than manage them as short-term rentals because of the operational
demands involved.
That highlights an important distinction in the market:
Buying a shortlet property and successfully operating one are two different businesses.
Is Lagos Already Saturated?
There is no easy answer.
Olatunde said the lack of reliable industry-wide data makes it
difficult to determine whether Lagos has actually reached saturation.
Information on the overall size and economic contribution of
Nigeria’s hospitality industry remains limited, making it difficult to
compare the number of available shortlet units with actual demand.
Individual operators’ occupancy figures also cannot automatically be treated as representative of the entire Lagos market.
A property recording 80% occupancy does not necessarily mean the broader market is performing at the same level.
Competition Was Already Showing
Earlier market research by Nairametrics found that more Lagos
property owners and investors were moving towards shortlets because of
the potential for higher returns, demand from Nigerians in the diaspora
and perceived advantages over conventional rentals.
But the same research also pointed to intensifying competition.
Some operators reported that the 2025 Detty December period was more difficult than previous years as new apartments spread demand across a larger supply base.
Bookings reportedly weakened significantly after the first week of January 2026.
Operators responded by upgrading their properties, improving
furnishings, adding premium amenities and investing in professional
management in an effort to stand out and generate repeat business.
Location Alone May Not Be Enough
As supply increases, differentiation becomes more important.
Operators are increasingly competing on factors such as:
- Interior quality and furnishingsReliable electricity and backup powerProfessional property managementAmenities and guest experiencePricingOnline visibility and marketingLocation and accessibility
Two-bedroom apartments remain among the more sought-after options
because they can accommodate a broad mix of business travellers,
families and leisure guests.
But even popular property types face the same underlying challenge: there are more alternatives for customers to choose from.
Some Estates Are Pushing Back
The expansion of Lagos’ shortlet market has also produced resistance in some residential communities.
In February 2026, the Banana Island Property Owners
and Residents Association prohibited shortlet and Airbnb-style rentals
within the estate, citing security and privacy concerns.
That decision highlights another risk for investors.
Market demand is only one part of the equation. Estate rules, community restrictions and local operating conditions can also determine whether a shortlet business is viable.
What This Means for Investors
Lagos’ shortlet sector is becoming more competitive and more operationally demanding.
The days when simply furnishing an apartment in a desirable
neighbourhood could guarantee strong returns are becoming harder to rely
on.
Investors now need to consider:
- Expected occupancy, not just headline nightly rates.Operating costs, including power, cleaning, maintenance and staffing.Competition from nearby properties.Marketing costs required to maintain visibility.Estate and community restrictions on short-term rentals.Seasonality, particularly the difference between peak and weak booking periods.
The biggest question is no longer whether Lagos has demand for shortlets.
It is whether each individual property can win enough of that demand at a price that still leaves a worthwhile margin.
As more apartments enter the market, scale, service quality and
disciplined management may determine which operators thrive—and which
ones struggle to fill their calendars.