The management of Transcorp Hotels Plc has said it would diversify its portfolio and reduce its workforce, as part of cost management initiatives, following “unprecedented losses” it suffered due to the COVID-19 pandemic.
The Managing Director, Transcorp Hotels Plc, Mrs. Dupe Olusola, who addressed a Press Conference on Thursday said they are taking these steps to ensure business continuity.
“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.”
Olusola said, “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 staff who would 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.
“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 warmth and the hospitality that it is known for.”