Transcorp Hotels, the hospitality arm of Transnational Corporation of Nigeria Plc. (Transcorp), has disclosed its plans to open a two-tower five-star hotel in Lagos.
The publicly quoted Transcorp made this known to BusinessDay at a parley attended by chief executive officers of its subsidiaries and other senior management staff, which took place on Tuesday in Lagos.
“With all due respect to all other hotels, there is room for an additional top hotel in Lagos; there is a lot of room for it, so we are bringing Transcorp Hotel to the city of excellence,” Owen Omogiafo, MD/CEO of Transcorp Hotels said.
Commissioned on the 21st of April, 1987, the Lagos branch of Transcorp Hotel is going to be located in the heart of Ikoyi with the aim to add more glamour to the already glamorous Lagos.
“Our location is very strategic and for those that don’t know, it is going to be a two-tower hotel; with one tower having 320 rooms and the other tower been a mixture of apartment and offices,” Omogiafo said.
The award-winning hospitality brand already has it presence in both Abuja and Calabar; the Transcorp Hilton Hotel, Abuja and the Transcorp Hotels Calabar.
The idea for a five-star hotel like Transcorp where government guests, business travelers and tourist could be lodged was conceived when the decision to relocate Nigeria’s capital from Lagos to Abuja was made.
Since 2005, when it beat a group of investors to emerge as core investor in the flagship of Nigerian hotels; the Nicon Hilton Hotel Abuja, now known as Transcorp Hilton Hotel, the company has continued to further a course that aims to reinvent the luxury hotel concept.
Since becoming the single largest investor in Transcorp Hilton Hotel in 2011, Transcorp Hotels has established a huge footprint in Nigeria’s high-end cities.
“There is a lot that we are exploring in our hotel business in terms of expansion, beyond just the traditional means of expansion, we are looking at a lot of strategies and when it is time we’ll share with the public,” Valentine Ozigbo, President/CEO of Transnational Corporation of Nigeria Plc., said.
A dive into the financials of Transcorp Hotels revealed that the hospitality company has a Compound annual growth rate (CAGR) of 5 percent for the last 4 years.
At the end of the first half of 2019, Transcorp Hotels reported a revenue growth rate of 16.5 percent on a year-on-year basis, from N8 billion in 2018 to N9.3 billion. Driven by a surge in its occupancy rate for both weekend and workdays.
Thus, its gross profit was up 18.9 percent from N5.8 billion a year ago to N6.9 billion in the review period.
The company expanded its Abuja branch, the Transcorp Hilton Hotel; with a cost of $100million. This drove its interest expense to N1.6 billion from N6 million reported for the same period of the preceding year.
In compliance with IAS 28, the hotel business started to expense borrowing cost during the period under review, thus accounting for a reduced PBT of N819 million in June 2019 as against the N2 billion is reported in 2018.
“As we have seen from the statistics, the hospitality business is a healthy one. Over the next few years, we’ll be done with our financing cost that we are carrying, just imagine what it will mean for shareholders,” Omogiafo said.
The company reported total asset of N113.97 billion in H1 2019 compared to the N111.28 billion in recorded in 2018.
Commenting about the hospitality industry in Nigeria and the players in that space, Omogiafo said “there is no sector that is not without its challenges but the key thing is knowing how you understand your business and having the patience to rise through the business.”
Endurance Okafor
