• Friday, May 24, 2024
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BusinessDay

Transcorp Hilton: Set to up the dyke in luxury hotels

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Transcorp Hilton is currently diversifying its on-going world class projects located in four cities in Nigeria; two new developments in Abuja, one in Calabar, Lagos and Port Harcourt respectively. Hiltons’ planned 300-room hotel in Ikoyi is a five star property with all the necessary facilities and trappings from leisure to business, spa to conferencing facilities, food & beverage, as well as, a modern bar. The hotel is expected to have a roof top bar which will offer visitors a better view of Lagos alongside a gym, nicely fitted swimming pool and other health facilities.

“We are also looking at a lot of other cities in Nigeria, even in Lagos; we are going to go beyond Ikoyi. Places like Warri for instance, beside the fact that it is a very important oil city, it also has our power asset, our sister company has the Transcorp Ughelli Power. We will have a lot of traffic we will be sending to Warri,  so it makes sense that we are also there beyond the fact that the market feasibility makes sense”, said Valentine Ozigbo, managing director and chief executive officer, Transcorp Hilton Abuja. The company is targeting business and leisure travelers who visit the country. It aims to provide best quality accommodation offering with the new projects and ultimately providing hospitality assets. “What that means is we intend to go into full leisure business where we can actually do stuff around the waterside, providing some gaming facility, all of these are within our purview. But right now, as far as the IPO is concerned, it is not information that is crucial”. He said.

Transcorp Hilton is currently targeting to raise about N8billion from its IPO which, according to Ozigbo, is stated clearly in the prospectus. He said the funds will be used as equity; part funding for  the new Ikoyi and Port Harcourt Transcorp Hilton projects, meaning  there will be other sources of funding for those projects as this will not be enough for the two projects; other sources being our internally generated funds and assets. Transcorp Hilton Lagos is projected to be a 300 room hotel, cited in Ikoyi on Glover Road, with all the key facilities as it is intended to be better than any other hotel in Lagos. “Right now we have advanced the design and awaiting nod from the Lagos State Ministry of Urban Development and Planning. Once we get the approval, we are actually ready to get the foundation works under way; we have signed contracts in that respect. Hopefully before the end of the year, the project will commence”.

Ozigbo went ahead to make some clarifications, “First let me make a very important point; there is no brand really coming into the market beyond maybe one or two. When they say brand is coming in here, none of these brands put money into any business in Nigeria apart from few South African brands that actually buy the asset and own them”. According to him, expansion in Nigeria is dependent on Nigerian businesses growing hospitality and then inviting foreign brands to manage it if so desired. “When you say for instance, that Marriot is coming into Nigeria, Marriot is not putting a penny into Nigeria. It is the likes of Jim Ovia, investing their hard earned money and then shopping for who to manage it. So, it is Nigerians that have the responsibility of spreading these business assets and it is a good thing that it is happening”, he stressed.  He stated that there are a lot of competitions but the good news is that the market is theirs to free up, as Hilton is the dominant brand in Nigeria, “and thankfully we have a long track record of being successful in what we are doing and we keep finding more ways to replicate that success; it is working, so just keep it going. Of course, the market is getting bigger so, we can even take a greater chunk of the market share which is what we are targeting”. Ozigbo said when Nigerians travel abroad; they look for a Hilton first before any other brands, irrespective of the other brands’ global rating. He attributed this to the fact that Nigerians have made Hilton their propriety brand and made it theirs. It is therefore gainsaying that the new projects will be instant successes from day one. He is convinced without an iota of doubt that even if the market is shrinking; Transcorp Hilton is covered because of the quality of services and facilities they offer. According to him, there is no quality hotel room in Lagos, the market is too virgin, untapped and density is very low. “If you walk across major cities in the world that Lagos is now competing with, you cannot move hundred meters without finding hotels near each other, but that is not the case in Nigeria. My point therefore is that there is low density, not high density; moreover, Lagos is growing, it is not static and eventually Nigeria is getting better and as long as the economy is growing, hospitality will thrive.

Transcorp Hilton has assembled the best technical partners to deliver these projects, in regards to the rooms, it has employed the services of a Swedish interior decoration company, touted as one of the best globally, that has only recently, and this year won two awards out of Europe. The company is expected to undertake the upgrade of Transcorp Hilton in Abuja and also the new hotels in Lagos and Port Harcourt. Ozigbo explains that “there is a philosophy that guides the designs; it is then translated across every detail; from the lighting to the bed, positioning and size. Of course, the Hilton also has their specifications which we must follow, because they would always want that Hiltons are similar in many respects. Even with the Hilton family, there are classes and ours is meant to be at the luxury end. It is clearly an upper class quality that is comparable with hotel anywhere else in the world. And by the way we are very happy to share some of the designs if it becomes necessary”.

For Transcorp Hilton, their business prospects in the country are very high, such that they hope to close this year very strong. “I am very glad that our government is dealing with all the issue around insecurity and thankfully Ebola is out of the way. The good news is that people look for us before they look for any other hotels, but even at that, we are not resting on our oars; we do not think that we have arrived; we are looking to improve on what we do. So, if we keep getting our priorities right; the years ahead will be much brighter. Even more importantly, the additions we are embarking on are very specific. We are building a five thousand capacity conferencing facility in Abuja, with the intention that, with the things happening in the city, Abuja can be transformed into a conferencing hub for Africa. What this means is that there will be more room-nights for us, more events, the likes of World Economic Forum (WEF) will not be a flash in the pan but something that happens repeatedly.

We think that the future is extremely bright and for us, with our core strengths, imagine the things we have put out there in the prospectus; one being long history, strong track record. If you look at the numbers we have posited from what we call average daily rates, our occupancy, down to the bottom line is level of profitability. Ours is one of the most important Hiltons’ globally. The group president of Hilton looks at top ten Hilton’s around the world and monitors what is going on there; we are one of those top ten. That is very important and the partnership we have with government has been very helpful, beside the Presidential Villa, there is no other place in Nigeria that is given attention like us. I will not disclose all the security details we have in place for obvious reasons, but I can tell you that government has been very supportive and all these has helped us in building the brand, as well as, all the awards we have won and important events we have hosted.  It is important to note that we have achieved all of these with very strong financials, zero debt profile. A lot of new hotels built around Lagos and Abuja, a lot of debts have been coming, so their ability to compete is weakened. We can compete in any way possible, we can go low margin; so with all these strengths mentioned, and given the strategic position we are taking in key cities in Nigeria, I think your guess is as good as mine”, he concluded.

Charles Ike-okoh & Mabel Dimma