2024 was (and is because the year isnt over) a tough year for many businesses. Hotels seem to have had it great. 

Ikeja Hotels and Transcorp Hotels had topline and bottomline growth. I also took a detour to UPDC’s hotel. Though not listed, but some colour was provided in the parent company’s 9M 2024 numbers. 

A bit on the title.

Maitama ( 1, Aguiyi Ironsi street to be precise) is where Transcorp Hotel is located. Ikeja is where Ikeja Hotel is located. 30 Mobolaji Bank Anthony road to be precise. 

About Ikeja Hotel 

Ikeja Hotel Plc., formerly Properties Development Limited, was incorporated on 18 November, 1972. It owns the Sheraton Lagos Hotel, and has a 12.8% stake in the Tourist Company of Nigeria Plc. (Owners of Federal Palace Hotel & Casino, Lagos

The Hotel was managed and operated by Starwood Eame License and Services Company BVBA up to June 2017 under an agreement dated 31 October 1980 and renewed 1 April 2008.

Subsequently Marriot International took over the management of the Sheraton brand from June 2017 due to acquisition of Starwood Eame License and Services Company BVBA. 

The principal activities of the group are operation of hotels and restaurants, apartment letting, recreational facilities, night clubs and business centre services, advisory and consultancy service.

Ikeja Hotels 9M 2024 

Revenue rose by over 60% from N7.6 billion in 2023 to N12.5 billion in 2024. Profit after tax went up by more than 3X from N587 million in 2023 to N2 billion in 2024. 

Profit margins are decent. 

For 9M 2024, for every N100 in revenue earned by the firm, N15.9 was profit. 

For 9M 2024, for every N100 in revenue earned by the firm, N13.9 was profit. 

Room revenue grew at a faster rate 

For hotels, the two key revenue lines are rooms and food and beverage. 

Room revenue grew at a faster rate year on year. Moving from  N4.9 billion in 9M 2023 to N8.5 billion in 9M 2024. Up over 70%  year on year. 

Food and beverage revenue rose a bit over 50% year on year. From N2.3 billion in 9M 2023 to N3.5 billion in 9M 2024. 

Likely dividend 

The company paid a dividend of 7.5 kobo from the 96 kobo it earned in FY 2023. That amounts to a payout ratio of 7.8%. 

Q3 2024 earnings per share was 31 kobo.

 9M 2024 earnings per share was 93 kobo. 

FY 2024 earnings  per share could be in the N1.20 to N1.50 range. Q4 is typically a bumper period for companies in the hospitality space due to the end of year festivities. 

If the firm maintains the same payout ratio, final dividend should be at least 10 kobo. 

About the company 

Transcorp Hotels Plc was incorporated on 12 July 1994 as a private limited liability company. . Following a successful Initial Public Offer (IPO), the Company was on 15 January 2015 listed on the Nigerian Exchange Limited (formerly Nigerian Stock Exchange) and its shares are publicly traded. 

The ultimate parent of the Company is Transnational Corporation (Transcorp) Plc with 76.16%  shareholdings. 

The Group is principally engaged in hospitality activities by rendering of hotel services by 

Transcorp Hotel 9M 2024 

Revenue grew by 67.3% from N28.9 billion in 2023 to N48.4 billion in 2024. 

Profit after tax from continuing operations went up by over 148% from N4.1 billion in 2023 to N10.2 billion in 2024. 

Segmental breakdown 

Room revenue grew by 67.8%  from N18.9 billion in 2023 to N31.8 billion in 2024. 

Unlike Ikeja Hotel, Beverage revenue grew at a slower pace. Up by 82% from N8.1 billion in 2023 to N14.9 billion in 2024. 

Some more colour 

In the earnings release, management provided some colour on occupancy rate and revenue per room.

Occupancy rate grew to 83% in Q3 2024 from 79% in Q3 2023.

Revenue per Available Room (RevPAR) grew by 64% from N106,244 in Q3 2023 to N174,376 in Q3 2024.

Bulk of revenue comes from room and food and beverage respectively. 

FY 24 final dividend outlook

Transcorp Hotel a few months ago paid an interim dividend of 10 kobo per share. 

In FY 2023, it paid a 20 kobo dividend from the 60 kobo in earnings it made that year. That’s a 33% payout ratio. 

Q3 2024 earnings per share was 35 kobo

9M 2024 earnings per share stood at 100 kobo

One can reasonably infer that FY 2024 earnings per share would come in at N1.30 to N1.50. 

A 30% payout ratio would amount to a final dividend of between 40 kobo to 50 kobo. 

Festival Hotel (not listed by the way) run by UPDC (which is listed) had decent topline growth and cut its losses massively. 9M revenue went up by over 100% from N409 million in 2023 to N918 million in 2024. 

Loss before tax dropped from N240 million in 2023 to N15.8 million in 2024