Serena Hotels sink to Ksh.1.2 billion annual loss
Published on: May 26, 2021 03:15 (EAT)
TPS Eastern Africa which trades as Serena Hotels across the region has posted a Ksh.1.2 billion loss for the year ending in December 2020. The loss, which reverses a Ksh.181.7 million profit booked in 2019, is largely attributable to the demise of hotel operations last year driven primarily by restrictions to contain the COVID-19 pandemic. The performance of the group of hotels which is listed on the Nairobi Securities Exchange (NSE) opens the window to a view of the devastation brought by restrictions such as hotel closures and a cap to the level of operations. TPS revenue from contracts with customers for instance tumbled by 71 per cent in the year to a flat Ksh.2 billion, falling from a high Ksh.6.8 billion in 2019. This means that Serena Hotels only made about 30 per cent of the revenues booked in 2019, a near three quarters collapse to income for the Group. While most hotels remain shut or with limited operations for the better part of 2020, this did not spare the establishments from incurring greater costs in the ‘closed’ period. For instance, Serena saw its financing costs soar by more than three times to Ksh.586.1 million from a lower Ksh.177.8 million in 2019. Nevertheless, the hotelier saw cushioning from State relief on income tax earning a Ksh.448.9 million tax credit to limit the Group’s losses in the year. Serena Hotels has nevertheless registered resilience to keep its doors open as some of its peers shut their doors strangled by the weight of the pandemic. For instance, the Intercontinental Nairobi which sits at a stones throw distance from Serena Hotels in Nairobi has kept its doors locked after the pandemic exacerbated its underlying woes. The strife for the hospitality players has coincided with a slash to non-resident visitors on the back of reduced international travel and the cancellation of meetings and conferences.