Transcorp Hotels swings back to profitability as occupancy rate lifts revenue to N22 billion

Transcorp Hotels capped a bounceback to profitability in 2021 with a more than two-fold expansion in turnover and a post-tax profit of N1.1 billion, its audited financial report showed, with a statement from the company on Monday linking the turnaround to an improvement in occupancy rate.

The Abuja-based firm slipped into loss in 2020 as global lockdowns aimed at taming the pandemic hampered the aviation operations and hurt the business of travel.

That had dire implications for related sectors including hospitality services, where Transcorp Hotels holds a sizeable slice of the market.

Revenue for the period accelerated 114 per cent to N21.7 billion amid improvement in room rental, which catapulted occupancy rate, the proportion of hotel accommodation taken by guests, from 55 per cent in January “to an all-time high of 80 per cent in December 2021, according to Chief Executive Dupe Olusola.

“We will continue to innovate and optimise all the facets of our business, from operational efficiency to guest engagement, and bolstering direct revenue,” she said.

“The good cost-saving habits and financial strengths that we cultivated during nearly two years of volatile market conditions will be enhanced.”

Op-ex, the cash spent on everyday running of business, rose by as much 37.9 per cent constraining profit margin to 5.1 per cent.

Profit before tax stood 81.4 per cent higher than the previous year’s, while after-tax profit climbed to N1.1 billion from a loss after tax of N6.3 billion year earlier.

l-r:, Company Secretary, Mrs. Kofo Olokun-Olawoyin; Non-Executive Director, Mr. Alex Okoh; Non-Executive Director, Mrs. Owen Omogiafo; Chairman, Mr. Emmanuel Nnorom; Managing Director/CEO Mrs. Dupe Olusola; Non-Executive Director, Mr. Alexander Adeyemi; Independent Non-Executive Director, Mrs. Bolanle Onagoruwa; and Non-Executive Director, Hon. Peter Elumelu, at the 8th Annual General Meeting of Transcorp Hotels Plc held at Transcorp Hilton Hotel Abuja on Monday. [PHOTO: Transcorp Hotel]

The company, whose flagship brand is the five-star Abuja’s Transcorp Hilton Hotel, announced plans two Septembers ago to cut its labour force by 40 per cent in a bid to turn the tables on plunging earnings and build resilience through the pandemic eruption.

“The pandemic changed the customer behaviour, arrival and departure patterns and the geographical business mix of the hotel,” Emmanuel Nnorom, the board chairman, said at the annual general meeting on Monday.

“We harnessed all these and dominated the market as we outperformed the industry average and the N10bn revenue recorded in 2020.”

Shareholders gave consent to a dividend payout of N717 million, translating to 7 kobo per share, which was paid to eligible persons on Monday, the statement said.