Despite the harsh operating environment, which has led to the closure of many businesses, the hospitality business is still booming based on the third-quarter financial performance of some hotel companies.
The year 2023 has been a hard time for most businesses hit by the naira redesign policy of ex-President Muhammadu Buhari’s government and the fuel subsidy removal which induced hardship for businesses and individuals alike.
The Central Bank of Nigeria went further to implement a managed float foreign exchange policy which led to the depreciation of the naira as companies posted billions in foreign exchange losses.
However, the hardship is not reflected in the books of Transcorp Hotel Plc and Capital Hotel Plc as both companies declared a combined N4.5bn profit after tax in nine months, up by 83 per cent compared to N2.46bn which they declared in 2022.
Analysis conducted by THE WHISTLER on their interim financial accounts ending September 2023 showed that their revenue for the period grew to N34.59bn, which represents a 26.4 per cent surge from the N27.36bn posted in the corresponding year of 2022.
Their revenue growth was driven primarily by the increase in revenue from hotel rooms which grew to a combined N21.56bn in 2023 compared to N15.36bn in 2022.
Another business line that contributed to their revenues was sales of food and beverage which rose from N10.6bn in 2022 to N10.9bn in 2023.
Transcorp Hotel enjoyed the lion’s share of the revenue and profit after seeing its activities boom in 2023.
In terms of revenue, the hotel posted N29.85bn in the nine-month period under review, a surge from the N22.65bn that it generated last year.
The profit after tax also jumped by 79.2 per cent from N2.27bn in 2022 to N4.07bn in 2023.
Capital Hotel’s books showed that N4.74bn was generated as revenue in nine months, a slight rise from the N4.71bn posted in 2022.
Capital Hotel generated N2.09bn revenue from rooms and office spaces and another N2.3bn on food and beverages while N309m was generated from other service that it rendered during the period.
But the company witnessed a 168.3 per cent rise in profit after tax from N187.3m in 2022 to N502.6m in 2023 principally driven by the decrease in the amount spent on the cost of sales.
Unlike in 2022 where the hotel spent N4.2bn on the cost of sales, the company saw a drastic reduction in sales expenditure in 2023 as only N1.77bn was spent.