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Transcorp Hotels Outperform Peers as Hospitality Sector Records 70% Average Occupancy Rate

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Transcorp Hotels Plc has outperformed peer rivals across key performance indicators as the hospitality sector continues to experience rebound after two years of pandemic related disruptions as the industry recorded 70 percent occupancy rate year to date.

Of course, Transcorp Hotels resilience and steadfastness amid rising inflation that steals workers’ wages and erodes consumer purchasing power, worsening insecurity that impacts the confidence of international guests and visitors, and a weak current that balloon the cost of import up means its stocks are an allure to investors who crave for entities that surmount macroeconomic headwinds.

The company is a big fish in a small pond as its N22.12 billion revenue as of September 2022 is much higher than the N13.15 billion combined sales of peer rivals: Ikeja Hotels, Tourist Corp, and Capital Hotels.

It is interesting to note that Transcorp Hotels gross profit which spiked by 51.52 percent is 6.25 times the combined figure of Ikeja Hotels and Capital Hotels all put together.

Transcorp Hotels recorded a gross profit margin of 72.31 percent, and that compares with Ikeja Hotels, 35.58 percent; Capital Hotels, 10.37 percent.

The largest hospitality firm continues to sweat its existing assets, aiming to ensure that it consistently delivers superior service to guests, while contemporaneously maximising revenue.

As part of its expansion plans, the company has commenced the construction of an Event Centre in Transcorp Hilton Abuja that would cater to the growing demand for large scale gathering.

This Event Centre, with a seating capacity of over 2,500 for multi-purpose events, is expected to be completed Q4 2023.

Transcorp Hotels continues to surpass industry and its target across key performance metrics that signals it is one of the best stocks on the NGXASI.

It is noteworthy that the company has an occupancy rate of 75 percent as at September 2022, which is higher than the 71 percent industry average, according to data from the company’s financial statement.

Also, the company’s revenue per room stood at N81,000, and that compares with N51,000 industry average, according to data from Transcorp’s financial statement.

The hospitality sector has overcome the coronavirus pandemic, thanks to improved business activities, boosted by the return of foreign guests and business travelers as well as increased corporate and government patronage across both independent and foreign brands.

It is expected that the hotel business across the globe will grow even amid the geopolitical tensions, rising interest rates as central banks seek to tame red-hot inflation, and a possible recession in some rich countries.

The global luxury hotel market size is projected to reach $238.49 billion by 2028, exhibiting a CAGR of 10.4% during the forecast period, According to Fortune Business Insights.

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