A financial consultant and Executive Director of Global InfoAnalytics, Musa Danquah has denounced the widespread claim that Rock City is the biggest hotel in Africa.
Mr Danquah, in scathing critique, questioned the financial viability and profitability of the hotel, despite its impressive room count.
The renowned consultant emphasized the importance of Total Revenue Per Available Room (TRevPAR) as a key performance indicator (KPI) for assessing hotel profitability.
“In finance, to assess the profitability of a hotel, let’s just look at one KPI, TRevPAR. Total Revenue Per Available Room is the total operating revenue of a hotel that includes the room revenue, food, and business revenue, etc. Basically, this accounts for all the means by which your property gains money.
“You can calculate TrevPAR by dividing the total revenue of your hotel by its total number of rooms. For example, if your total revenue collected for a day was GHc40,000 and you have 200 rooms then your TRevPAR is GHc200”.
Musa Danquah, Financial Consultant, and Executive Director Global InfoAnalytics
The renowned financial consultant challenged Rock City Hotel’s TRevPAR with those of the hotels it attempted to acquire, asserting “What is the TRevPAR of Rock City Hotel compared to the hotels it was trying to acquire?”
Conflict of Interest and Financial Arrangements
Furthermore, Mr Danquah, the Chief Executive Director and Head of Public Private Partnership Advisory at DWA Risk and Financial Management expressed concerns not only about the perceived conflict of interest regarding the terminated transaction.
He raised deep concerns also about the financial arrangements for the payment of the shares to be sold to the Social Security and National Insurance Trust (SSNIT).
He criticized the transaction advisors’ report, highlighting that Rock City lacks the balance sheet to pay the agreed amount.
Mr Danquah particularly criticized the leadership of the Social Security and National Insurance Trust Board, pointing out that the SSNIT’s board did not prioritize Ghana’s interests in the sale of the four hotels.
“If you read the transaction advisors report and you are a board member and you are happy with it, then you have no business sitting on any board. I heard the advisor point out that Rock City does not have the balance sheet to pay for the agreed amount and you are saying it is the biggest hotel in West Africa.
“I have sat on a board for more than 10 years and also serves as the chairman of the finance committee of the board. This kind of transaction will not have passed under my nose and make its way all the way to the main board, it will be dead on arrival. I was not paid the kind of money SSNIT board get paid but I put the company’s interest first at all times but at SSNIT they could not put Ghana’s interest first, why?”
Musa Danquah, Financial Consultant, and Executive Director Global InfoAnalytics
As an experienced transaction advisor, Mr Danquah called for the need for better preparation on Rock City’s part, urging Rock City to build a strong balance sheet, ensuring liquidity through profit or equity/debt injection, and providing clear sources of funding for purchases before submitting bids.
He raised questions about Rock City’s shortlisting process, wondering why certain financial criteria were not considered when bids were submitted, leading to widespread concerns about the sale.
The renowned Financial Consultant emphasized the issues regarding Rock City’s financial standing and the integrity of the transaction process.
He called for greater scrutiny and transparency in such high-stakes deals, ensuring that Ghana’s interests are safeguarded in future transactions.
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