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COVID-19: Africa’s Hospitality Industry Loses $50 Billion

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Hospitality Industry In Africa Loses $50 Billion to COVID-19

Global health pandemic has erased more than $50 billion in revenue from the hotel and tourism industry in Africa, according to a recent report.

African Union stated this in a report titled “Impact of the coronavirus (COVID-19) on the African economy”.

However, on Thursday Transcorp Hotel admitted suffering unprecedented losses and therefore has decided to let go 40 percent of its present staff as it moves to restructure and reposition the company for the new normal.

To this end, the hotelier is diversifying its portfolio and reducing its workforce as part of its cost management initiatives,” Transcorp Hotels Plc Managing Director Mrs. Dupe Olusola, said at a news conference yesterday.

She went on: “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.

“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 optimised.”

Mrs. Olusola further disclosed how the company plans to adequately compensated its workers given the peculiarities of the economy at this time.

She said: “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.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.