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In this interview, Valentine Ozigbo, CEO, Transcorp Hotels Plc, discusses Transcorp Hilton at 30, the Nigerian hospitality market and outlook of the economy. He was interviewed by Jide Akintunde, Managing Editor, Financial Nigeria.

Jide Akintunde (JA): Transcorp Hotels has remained a topmost franchise in the Nigerian hospitality industry. What does it take to be so rated?

Valentine Ozigbo (VO): Transcorp Hotels has been ranked, in recent years, as the number one business hotel in Africa by the World Travel Awards (WTA). We have also been nominated for the same award in the 2017 annual WTA. Voting is currently going on and we are optimist we will be adjudged again as the winner, becoming the leading business hotel in Africa for three consecutive years. We are rated number one in the African hotel industry, not just in Nigeria.
    
What makes a hotel unique is a combination of factors. You must have a very good location; you need to also have the right infrastructure, the right team, the right vision and culture, and proper governance.

To emphasize the importance of location, Transcorp Hilton is in the heart of Maitama, near the Three Arms Zone. Fortunate for us, you cannot find a competitor to replicate this type of locational advantage in Nigeria. While we already have that here, location is a key issue for consideration in the new assets we are acquiring elsewhere.

In terms of infrastructure, we have an iconic building here. From the design, to the internal architecture, the engineering, and the furnishings – it is a masterpiece. And we have all manner of sporting facilities. You can actually stay here for a month and won't need to leave the gate. We have over 50 shops, including banks and restaurants. Our lobby has become the melting pot in Abuja. You can see whoever you need to see in our lobby.

We are the only true five-star hotel in Nigeria, and we will keep improving the infrastructure. I am happy to share with you some of the pictures of the new floors we have already upgraded. You will not believe you are in Africa.

But the greatest asset we have is our team members. We have a fantastic workforce that is very loyal. There are people who have worked with this company for 30 years, meaning they have been here since the hotel was opened. I call them legends. We will recognize them during our 30th anniversary celebrations. We have tried to keep them motivated by training them, paying them well and looking after their welfare. It is the experience a guest receives and the services provided by our staff that will make the guest to keep coming back.

Then we have the force of Hilton Worldwide behind us. As the operator of choice, they have done exceptionally well for this hotel. Another reason we are successful is that we have the right ownership. We are not a silent owner of the hotel. A lot of hotel groups and hotel owners lack either the proper disciple or governance. But Transcorp has both attributes.

Let me emphasize the aspect of governance. We continuously update our processes. We have also imbibed the kaizen process in our entire workflow. Kaizen is about creating a culture of continuous improvement. The fact that you have done it this way doesn't mean that's the best way it can be done. We always challenge ourselves to see how we can become better.

A simple key to success is to truly know who you are. Determine where you want to be and do what is necessary to get there. We want to remain that company with choice hospitality assets around Africa, starting from Nigeria. We also want to be that company that is on the hallmark for achieving excellence in whatever we are doing.

JA: But no doubt, the Nigerian hospitality industry has in recent years been impacted by head winds, including the current economic recession, security and even the closure of the Nnamdi Azikiwe International Airport, Abuja. How do you navigate the terrain?

VO: 2016 was a tough year. There was a news report with the title, "Hotel Occupancy Drops Below 35% as Recession Bites." The current administration took a bit of time to fully settle down, causing investors' confidence to dwindle. To compound the issues, monetary policy and foreign exchange policy were in disarray. At a point, the value of the naira dropped to N500 per dollar in the parallel market, before certain measures taken by Central Bank of Nigeria (CBN) started to stem the fall of the local currency. All of these, and rising inflation, created a perfect storm for companies operating in Nigeria.

For us at Transcorp, we were not taken unawares by these developments. We started that year with an outlook that it was going to be a tough year. We sat down and strategized. From our group's office, we received a well-articulated memo on execution and efficiency. Basically, we were to properly manage ourselves for this storm that was about to come. But the question was: how were we going to grow our business, manage costs and streamline processes?

We took a number of measures, including import substitution, and fortunately, 2016 became a remarkably positive year for Transcorp Hilton. We outperformed the entire industry and that was extremely exciting.

For 2017, some of the challenges I mentioned earlier have remained. But even more have piled up. Some activities of government have slowed down as the President attends to his health. Although we have had the Acting President in the periods the President has been out of the country, it has not been exactly the same.

For us in this business, part of our key opportunities is welcoming top guests of the government, including Presidents from different countries and international business leaders. If for instance, five Presidents were supposed to visit; maybe, only two came during the President's absence. The fact that those three didn't come means a loss of revenue for us.

To compound the matter was the closure of Abuja airport. That was a major negative factor for us. Big conferences and AGMs didn't take place in that period. Businesses that anticipated the closure tried to shift elsewhere, and we noticed our occupancy dropped tremendously. Nevertheless, we did our best to navigate through it. We hosted two events, which attracted over 4000 people; we engaged in promotions to attract Abuja residents, not just to our F&B outlets but also to our rooms. Thankfully, the government completed the airport runway repair right on schedule. We are now back to full activities. Also during that low activity period, we fast-tracked the upgrade of our hotel, and made a lot of progress.

We haven't had a smooth ride but we are a very dynamic organization, always looking for how to overcome whatever challenges we face.

JA: What should prospective guests and visitors look forward to at Transcorp?

VO: We want guests to come to Transcorp Hilton to experience the warmth of our hospitality. We want them to have a home away from home, and experience the true Nigerian culture. When you come in here, we want you to have the security, comfort and peace of mind.

We train our people to guarantee safety of life and property, and to provide exceptional services to our guests, giving you what you expect and more. When you visit Transcorp Hilton either for business or leisure, your overall experience must be better than what you can ever have anywhere in Africa. That is a promise we make to our guests and we will do our best to live up to it.

JA: Transcorp Hilton maintains only the Abuja hotel in its portfolio. Many Nigerian hotel markets are now recognized by geography and rating, with a number of local and international hotel brands expanding in the markets. How is Transcorp Hotels engaging this evolution?

VO: In terms of the portfolio of hotels owned by Transcorp Hotels Plc, there are two at the moment. The first one is Transcorp Hilton Abuja and the second is Transcorp Hotels Calabar. But Hilton is managing only the one in Abuja.

Expansion is a major activity in the hotel industry. We are not just aggressively pursuing expansion, we want to lead expansion of hotel assets in Nigeria. As part of this strategy, we have identified our Phase A, Phase B, and Phase C targets. Overall, we want to be in key locations in Nigeria.

Our Phase A expansion entails Abuja, Lagos and Port Harcourt. We have gone through this extensively. Apart from operating this hotel in Abuja, we are also developing a 5,000-capacity multipurpose banquet centre in Abuja to help transform the city into a major conferencing destination. When you talk about conferring hubs in Africa, Abuja is not a strong contender. The big contenders are Nairobi, Addis Ababa, Durban, Cape Town, and Johannesburg. Abuja needs to be at the top of that list. With this project, we will be able to create a full community and Abuja will begin to attract big conferences.

The designs for the banquet centre are actually completed; the tender process is done and we are negotiating with the selected contractor. As soon as the economy improves, and we are able to continue with our expansion programme, that is one of the first projects we will embark on.

We are also looking to build a 200-units luxury apartments within Abuja behind the poolside of Transcorp Hilton. Beyond Abuja, we acquired land in a prime location on Glover Road in Ikoyi, Lagos to build two towers. One is a 320-room five-star hotel, to be managed by Hilton. The other is a 20-floor office complex. We have completed the design, tendered and have now finished the piling work for the hotel site. We believe in about three years from now, the hotel will be operational.

We also acquired 10,000 square metre land in Port Harcourt. We intend to build a 250-room five-star hotel in the city. So, expansion is part of our group strategy and we are pursuing it aggressively and methodically. When we are done with these primary cities, we intend to move to secondary cities, where we may begin to introduce lower star hotels. That is part of our growth trajectory.  

JA: If you were to reflect on your leadership of the Transcorp Hotels so far, what would you like to identify as the values you have infused into the hotel management and in leading the team of professionals working with you?

VO: I like to say three things. One, you can only give what you have. Two, I am a member of a strong group, meaning I also leverage the values from the group. Three, the values that our partners have brought must also be recognized and emphasized.

On the first point, I come from a strong financial and leadership background. In leadership today, you need both the technical competence and emotional intelligence. From Day One, I have seen where my tutelage in these areas has helped me to steer this company in the right direction. It has helped me to make sure we strengthen the governance framework, that we are a responsible corporate citizen, and our accounts are up-to-date. The values I have brought to this company have also helped me to make sure we have a well-articulated vision, and it is professionally and profitably executed.

This is how we have been adjudged as the number one hospitality company in Africa. Last year, I was decorated with a Seven-Star CEO of the Year award. I was the first CEO to be so decorated by this body. The award was given to me in Spain at a global gathering where the legends of the industry were present. They have seen a lot of transformative work we have done in this hotel and the new life we are infusing into it.

I have achieved all of this and more, not just because of who I am but also because of the group I represent. I get my direction from the group. Transcorp Hotels Plc is a subsidiary of Transnational Corporation of Nigeria Plc, which is part of the Heirs Holdings family. So apart from the Group CEO, Mr. Emmanuel Nnorom, we also get our vision from the Chairman of Heirs Holdings, Mr. Tony Elumelu, who helps to drive us to the level of excellence we are achieving.

And the fact that we have Hilton worldwide as operator makes my job easier. I basically make sure they do what they need to do and they do that to the satisfaction of our guests.  

JA: Nigeria is definitely climbing up from the depth of the economic recession that began last year. What should investors in Transcorp Hotels look forward to in the imminent post-recession years?

VO: Our investors are already happy with the performance of the company even in the recession. This means they should be ready for a bumper harvest post-recession.

Our business moves with the economy. When the economy is growing, the middle-class is growing, and spending power is higher. As the economy grows, people are not going to be as sensitive to rates and pricing as they currently are.

The good news is we are a choice hotel. For a lot of people who don't stay here, it can only be because they cannot afford us. When we get out of the recession, many more will afford us and they can stay here. We are also a flexible hotel. When we need to adjust rates to accommodate certain people, we do so.

But overall, we expect that post-recession our turnover will be higher; our profit should be higher. And with the upgrade we are doing and the new products we are creating, we are adding more cashflow lines to our business. Therefore, investors should expect higher dividend, ultimately.

JA: In general, what is your outlook of the hospitality industry – both local and global – and what trends are shaping it?

VO: There are two major trends that I need to share. One, Nigeria remains a strong pipeline nation for hospitality. What that means is there is a lot of opportunity here to develop different hospitality assets, which come with future growth.

We have always been growing, but enhanced growth is imminent. Post-recession, investors will begin to push in money into the Nigerian economy, and a lot of that will go into developing hospitality assets. A lot of the major brands abroad have shown strong interest in trying to manage and operate assets in some parts of Nigeria. That is a positive trend, which shows that the appetite is strong.

The second trend is that domestic tourism is on the rise. It is still very low compared to what obtains in established markets. But we are looking forward to when Nigerians will leave Lagos, Port Harcourt, Enugu, and Kaduna, and they will not be going to Dubai, Saudi Arabia, Jerusalem, London or New York. They will go to Abuja or visit a games reserve to have fun. And they would have attended to their needs for a summer holiday.  

In our own way, we have been trying to push this trend. We celebrate every national event here with promotional activities. Whether it is a national holiday, Easter, Valentine's Day, Ramadan, Christmas, or even weekends, we have promotional activities. We want to encourage people to stay and have fun in Abuja. We have now embellished this promo with a number of other incentives. We provide packages for tours within and outside Abuja.    
 
JA: Transcorp Hilton is 30 years. Would this milestone be celebrated; if yes, what would be the programme highlights?

VO: This hotel was conceived more than 30 years ago, when a decision to move the federal capital of Nigeria from Lagos was envisioned. It went into operation in 1987. We plan to engage in a number of activities to celebrate this very important milestone, which coincides with the upgrade of our facilities.

We want to appreciate the loyalty of our guests, and also say thank you in a very special way to some of our team members. We are going to engage a few guests to share their memorable experiences at the hotel with us. We will party, and invite some of the past stakeholders from those early days.

We will publish a coffee book, which will include important visits to the hotel such as when the Queen of England visited as well as several Presidents and important personalities we have hosted over the years. This hotel had the privilege of hosting over 40 heads of government in one particular night. I don't know any hotel in the world that has had such a privilege. There is no year we don't host up to 30 Presidents in this hotel.

We will give copies of the coffee book to our guests. We are likely to have this major event in July. The final date will be announced in due course.