Connect with us
Paramount
Advertisement
Ican
Advertisement
IZIKJON
Advertisement
Stanbic IBTC
Advertisement
Polaris bank
Advertisement
Binance
Advertisement
Esetech
Advertisement
Patricia
Advertisement
Fidelity ads
Advertisement
app

Hospitality & Travel

Nigerian hotels count revenue losses due to pandemic-induced plunge

The hospitality industry continues to suffer the effect of the COVID-19 pandemic.

Published

on

Transcorp Hotel Plc

COVID-19 has affected many sectors of the Nigerian economy, and one of the hardest hit is the hotel industry. The industry felt the impact when the Federal Government shut the economy in April, as it asked all businesses in Abuja, Lagos, and Ogun States to lock up. Only the one offering essential services were exempted.

Unfortunately, hotels are not considered among essential services providers. For this reason, they were mostly shut down, except for the few that were used as isolation centres. Needless to say that the adverse effects of the shutdown were huge. Revenue suffered, even as many hotel workers were laid off.

READ MORE: Africa Prudential suffers revenue drop as Covid-19 bites contracts business

Pandemic bleeds Transcorp, Ikeja, Capital Hotels’ revenues

About three of Nigeria’s biggest hotels are listed on the Nigerian Stock Exchange. Their latest earnings reports have shown the extent of the lockdown’s impacts on their financials. These hotels are:

  • Transcorp Hotels Plc, owners of Transcorp Hotels in Calabar, Port Harcourt, and Ikoyi
  • Ikeja Hotel Plc, owners of Sheraton Lagos Hotel and a significant shareholding in Tourist Company of Nigeria  Plc, (owners of Federal Palace Hotel & Casino Lagos)
  • Capital Hotel Plc, owners of Abuja Sheraton Hotel

Transcorp Hotels: In the quarter ended June 2020, Transcorp Hotels’ room revenue fell to N3.03 billion compared to the N5.88 billion in the same period in 2019. Business activities in the nation’s commercial capital, Lagos, grounded to a halt between the months of April and May after the government imposed restricted movements in a bid to combat the spread of the Coronavirus. Gradual easing commenced in June but economic activities in most sections of the economy remain subdued.

READ MORE: Covid-19: Unilever Nigeria suffers 40% revenue loss

Ikeja Hotels: Although Ikeja Hotels Plc has not released its second-quarter result, the revenue loss-handwriting is already on the wall, as it declared a revenue loss in its quarter ended in March 2020. This was before COVID-19. Room revenue fell to N1.56 million compared to N1.65 million recorded within the same period. The company’s revenue also witnessed a drop, when it fell to N1.59 million in 2019 to N1.61 million as at the end of March 2019. But this did not affect the Profit after Tax of the Group, which rose to N252.54 million from N130.13 million in 2019.

The Backstory: Nairametrics had reported Capital Hotels Plc’s 2020 second-quarter results which revealed that its revenues fell by 88% compared to the same period in 2019. The company reported a loss of N235 million in the quarter.

In the second quarter, which is the period April to June 2020, the company reported a revenue of N142.3 million compared to N1.18 billion in the same period in 2019. Its latest result is one of its worst quarters on record even as the first quarter of 2020 produced revenues of N993 million. Room revenues were only N64.3 million in the quarter ending June 2020 compared to 502.7 million in the quarter ending March 2020.

READ ALSO: Under 40 children of billionaires sitting on the boards of mega quoted companies (2)

Abuja Sheraton has been a shadow of itself for years seeing as its owners seek to recapitalize. However, the huge demand for hotel accommodation in the nation’s capital has helped the company deliver revenue growth. The company’s revenues have risen from N4.69 billion in 2015 to as high as N5.9 billion in 2018. Revenue fell to N5.1 billion in 2019.

When will the industry come out of the woods?

Managing Director of W Hospitality Group, Trevor Ward,  explained that the industry would be on the part of recovery once the borders and skies are reopened. He said:

Whilst countries like South Africa and Kenya can look to the domestic market for demand, as they can drive to hotels, in Nigeria we rely on air travel for our domestic and international guests, so without flights, no guests.

bitcoin train

READ MORE: Loan: CBN disburses over N300 billion to SMEs, health, agric, manufacturing sectors

Binance

“Then, there is the fact that for many cities in Africa the demand is almost entirely commercial and/or government, and unheard-of reductions in GDP, and therefore corporate and state incomes, means there will be a reduction in demand from those sources. “Soon”? No, I don’t believe it will be soon, but then the resilience of Africa and the Africans is legendary, and a return to growth is not so far away.”

Irrespective of how long it will take the industry to survive the pandemic and its effects, like other industries, it is important for operators to look inwards and re-engineer the processes to cut costs, and look outwards to customers, maintain contact, inform them about the steps being taken to ensure their safety when they return.

Jaiz bank ads

Abiola has spent about 14 years in journalism. His career has covered some top local print media like TELL Magazine, Broad Street Journal, The Point Newspaper.The Bloomberg MEI alumni has interviewed some of the most influential figures of the IMF, G-20 Summit, Pre-G20 Central Bank Governors and Finance Ministers, Critical Communication World Conference.The multiple award winner is variously trained in business and markets journalism at Lagos Business School, and Pan-Atlantic University. You may contact him via email - [email protected]

Click to comment

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Business

NAHCO recalls suspended GMD

NAHCO recalled Adetokunbo Fagbemi, its Group Managing Director and Chief Executive Officer.

Published

on

NAHCO

The Board of Directors of Nigerian Aviation Handling Company Plc (NAHCO Aviance) has recalled Mrs. Adetokunbo Fagbemi, the Group Managing Director and Chief Executive Officer of the aviation handling firm.

The GMD was suspended over Management’s failure to diligently secure the delivery of a purchased equipment from vendor within the contracted period and Management’s inability to provide satisfactory/acceptable reason for the unreasonable long delay.

This was disclosed by the Board via a statement issued and seen by Nairametrics on Thursday.

It stated, “The Board is however pleased to inform the investing public and the Exchange that on, Tuesday, February 24, 2021, a satisfactory evidence of departure and arrival dates of the equipment has been received by the board from the equipment manufacturer.

“Consequently, the Board at its emergency meeting today, February 24, 2021, has recalled the Group Managing Director/Chief Executive Officer, Mrs. Adetokunbo A. Fagbemi from the suspension and she has resumed work.”

What you should know

  • The GMD was suspended by the Board at a meeting held on 27th of January 2021 in line with the Board’s earlier decision that if a certified bill of lading for the equipment was not received by 2nd February 2021, the GMD/CEO shall proceed on suspension with half pay until receipt of acceptable evidence of equipment shipment from the manufacturer.
  • Since Fagbemi commenced her suspension on February 3rd, 2021, Mr. Olumuyiwa A. Olumekun, the Group Executive Director, Corporate Services, has been acting as the GMD/CEO.

Continue Reading

Hospitality & Travel

London’s Heathrow airport slides into £2 billion annual loss

Following the devastating impact of the COVID-19 pandemic, London’s Heathrow airport has recorded a net annual loss of £2 billion in 2020.

Published

on

Ethiopia to overthrow London Heathrow with Africa’s largest airport worth $5 billion 

London’s Heathrow airport has recorded a net annual loss of £2 billion in 2020, underlining the devastating impact of the coronavirus pandemic on the aviation sector.

This is as 2020, which has been identified as one of Heathrow’s most challenging years has record passengers’ level not seen since the 1970s.

This disclosure is contained in a public statement seen on the company’s website and seen by Nairametrics.

The company said that the number of passengers dropped to 22.1m, more than half of the numbers that travelled in January and February.  It pointed out that the overall revenue fell 62% to £1.2bn and adjusted earnings before interest taxes depreciation and amortization (EBITDA) fell to £270m.

The company said in order to weather the storm, realizing that airports have very high fixed costs, it acted quickly to cut gross operating costs by nearly £400m, reduced capital expenditure by £700m and raised £2.5bn in funding including a £600m capital injection. The firm ended the year with £3.9bn of liquidity, enough to see us through until 2023.

The airport which is one of the busiest in the world reported a 28% decline in cargo volumes, showing the cost to the economy of shutting down aviation.

Passenger planes from Heathrow are the UK’s global trading network, carrying British exports and inbound supply chain. Economic recovery will be held back until long haul passenger flights are restarted, especially to key markets such as the US

The Chief Executive Officer of Heathrow, John Holland-Kaye said, “We can be hopeful for 2021, with Britain on the cusp of becoming the first country in the world to safely resume international travel and trade at scale. Getting aviation moving again will save thousands of jobs and reinvigorate the economy.”

He also said, “2020 has been one of our most challenging years – but despite £2bn of losses and shrinking to passenger levels we haven’t seen since the 70s, I am hugely proud of the way that our colleagues have kept our passengers safe and the UK’s hub airport open for vital supplies throughout. We can be hopeful for 2021, with Britain on the cusp of becoming the first country in the world to safely resume international travel and trade at scale.

‘’Getting aviation moving again will save thousands of jobs and reinvigorate the economy, and Heathrow will be working with the Global Travel Taskforce to develop a robust plan underpinned by science and backed by industry. The Prime Minister will then have the unique opportunity to secure a global agreement on a common international standard for travel when he hosts the G7 in June. In the meantime, we need next week’s Budget to support aviation’s recovery by extending furlough and providing 100% business rates relief.”

What you should know

  • The United Kingdom is one of the countries most affected by the coronavirus pandemic, with the aviation sector one of the most affected due to the lockdown.
  • The International Air Transport Association (IATA) had called for urgent government assistance and warned that airlines would lose $252bn (£215bn) in revenues in 2020, more than double its earlier worst-case forecast.

Continue Reading

Coronavirus

IATA COVID-19 travel pass app to be ready soon

The pass is an app that verifies a passenger has had the Covid-19 tests or vaccines required to enter a country.

Published

on

FAAN Recruitment scandal, Nigerians hit with over 60% delayed and cancelled domestic flights in 2018, Nigerian Airlines, delayed flight, Air travellers may soon witness fare hike due to VAT increase 

The International Air Transport Association (IATA) is expecting that its digital Covid Travel Pass will be ready for roll-out in a matter of weeks.

The pass is an app that verifies a passenger has had the Covid-19 tests or vaccines required to enter a country.

This was disclosed by Vinoop Goel, IATA’s regional director of airports and external relations who said,

The key issue is one of confidence. Passengers need to be confident that the testing they’ve taken is accurate and will allow them to enter the country.

“And then governments need to have the confidence that the tests that the passengers claim to have are one which is accurate and meets their own conditions.

“We are currently working with a number of airlines worldwide and learning from these pilots. And the plan is to go live in March.

“So basically we expect to have a fully functional working system over the next few weeks.

“We do have a case in the Republic of Korea that does require a paper certificate, so we are working with the government there to ensure they will allow digital certificates to be accepted.”

What you should know

  • According to IATA, the Travel Pass is designed in a “modular” way, so that it can work with other digital solutions that are being trialed around the world.
  • The App will be available on iOS and Android platforms and to be free to passengers.
  • Singapore Airlines was the first airline to start trials of the travel pass in December.
  • Etihad, Emirates, Qatar Airways, Air New Zealand are among the other airlines currently conducting trials, and IATA says it is discussing the pass with most airlines throughout the Asia Pacific region.
  • It is to be noted that the closest paper equivalent to the app is the Yellow Card, a World Health Organization document which confirms passengers have been vaccinated.
  • The airline industry plummeted nearly 70% in 2020 compared to 2019, as Covid dealt a serious blow on the operators and the industry.

Why this matters

The pass is being seen as essential for reopening air travel, as many countries still have strict restrictions or quarantines in place.

An app has become quite essential considering the high level of risk of fraud associated with paper certificates.

According to BBC News report, “Europol recently revealed that a forgery ring in France had been selling negative test results to passengers at Charles de Gaulle Airport and fraudsters had also been apprehended in the UK for selling forged results”.

In many other countries, there have been large-scale frauds of forging negative results for passengers, with several law enforcement officers indicted in the acts.

bitcoin train

The industry is hoping for a recovery in 2021, but it’s unlikely that the vaccine rollout will solve the problem immediately, which is part of the reason IATA thinks the Travel Pass is needed.

Binance

Continue Reading
Advertisement




Advertisement

Nairametrics | Company Earnings