Transcorp Hotels Plc says it has suffered unprecedented losses during the COVID-19 pandemic and is looking to restructure the business strategy of its hotels, reduce workforce and optimise its operations.
The Managing Director, Transcorp Hotels Plc, Mrs Dupe Olusola, in a statement on Friday entitled, “Transcorp Hotels hard hit by impact of COVID-19,” said the demand for company’s services had hit its lowest of five per cent.
The management of the hotel said it would be taking steps to ensure business continuity in the wake of the losses recorded due to the COVID-19 pandemic.
It said it was diversifying its portfolio and reducing its workforce as part of its cost management initiatives.
Olusola said, “The impact of COVID-19 on the business is like nothing the company has ever witnessed.
“The hotel and hospitality industry in Nigeria has 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.”
She added, “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 acquisition and investment in 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 optimised.”
She said negotiations were ongoing to ensure that employees who would be impacted were 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, among other payment settlements, will be activated,” she said.