Capital Hotels Plc, owners of Abuja Sheraton said its revenues fell by 88% in the second quarter of 2020 compared to the same period in 2019.
In its 2nd quarter results released on Tuesday, the company reported a loss of N235 million in the quarter.
In the second quarter, which covers the period of April to June 2020, the company reported a revenue of N142.3 million compared to N1.18 billion the same period in 2019. Business activities in the nation’s capital territory shut down in the month of April and May as the government imposed restriction of movement to combat the spread of coronavirus. Gradual easing commenced in June but economic activities in most sections of the economy remain subdued.
Its latest results is one the worst quarters on record even as the first quarter of 2020 produced revenues of N993 million. Room revenues was only N64.3 million in the quarter ending June 2020 compared to 502.7 million in the quarter ending March 2020.
Abuja Sheraton has been a shadow of itself for years seeing as its owners seek to recapitalize. However, the huge demand for hotel accommodation in the nation’s capital has helped the company deliver revenue growth. The company’s revenues have risen from N4.69 billion in 2015 to as high as N5.9 billion in 2018. Revenue fell to N5.1 billion in 2019.
Nigeria’s hospitality sector is one of the hardest hit in the economy as the economic lockdown took its toll on business travels to the capital territory. The lockdown also affected air travel as the nations airspace remained closed to commercial travel except for private jets and other essential services.
Most 3-4 start hotels in Lagos remain either closed or operating minimally since large Nigerian hotels rely on business travel to boost hotel occupancy rates.
The hotel industry faced a different challenge in the first three months of the year when the world stood in shock as the US bombed an Iranian General and oil prices began its steep fall. Coronavirus was still considered a strange Chinese virus.
However, as economies across the world restricted travel in February, business travel in Nigeria was the first to suffer the consequences. Capital Hotel and Ikeja Hotels are the two major listed hospitality businesses on the Nigerian Stock Exchange.