Transcorp, other African Hotels & Tourism loss over $50bn amid COVID-19

*As Transcorp Hotel sets to cut 40% workforce

By Ibraheem Olamilekan

The Managing Director, Transcorp Hotels Plc, Mrs Dupe Olusola has said that COVID-19 pandemic has caused the African Hotel and Tourism industry to lose over $50 billion in revenue attributed to restriction on large gatherings, the switch to virtual meetings and fear of the virus, among others.

To this end, she reiterated that hotelier is diversifying their portfolios and reducing workforce as part of their move to initiate effective cost management.

She also pointed out that Transcorp Hotels Plc will be cutting down its workforce in a move to ensure the business continuity in the wake of losses recorded due to the COVID-19 pandemic.

This was disclosed by the Transcorp boss at a Press Conference, stating that the impact of COVID-19 on business is like nothing the company has ever witnessed, adding that the hotel and the hospitality industry in Nigeria have never faced a crisis that brought travel to a standstill, including the Ebola Virus Outbreak of 2014 and the recession of 2015.

“The slow pick up of international travel, restriction on large gatherings, the switch to virtual meetings and fear of the virus, has drastically reduced demand for our hotels and occupancy levels to its lowest of less than five per cent.

“Despite the losses incurred we have fulfilled our obligations to staff. At the inception of the pandemic, we maintained a 100 per cent salary payment to our over 900 employees in March and April. We also activated various cost-saving initiatives such as renegotiations of service contracts and restructuring of our loans.

“We suspended further commitment to buy fixed assets and operating equipment as well as reducing our energy consumption and maintenance costs. Despite undertaking these, it has become apparent that more fundamental changes need to be made for the business to survive. To this end, our workforce headcount will be reduced by at least 40 per cent, and our reward system will be optimized.”

“Negotiations are ongoing to ensure that our colleagues who will be impacted are adequately compensated given the peculiarities of the economy at this time. A health insurance package to reduce their health burden costs, especially during the pandemic, amongst other payment settlements, will be activated. Equally, all Executives of Transcorp Hilton Abuja have now taken a pay cut.

“As one of the leading hospitality brands in Africa, Transcorp Hotels Plc has stated its commitment to uphold service standards and ensure that all guests continue to experience the warmth and hospitality that it is known for”, Mrs Olusola further disclosed.