SSNIT considers leasing loss-making hotels as turnaround plan takes shape

The Director-General of the Social Security and National Insurance Trust (SSNIT), Kwasi Afreh Biney, has assured Ghanaians that the Trust has no plans to sell any of its hotel investments despite ongoing efforts to restructure and improve the performance of some assets within its hospitality portfolio.

Instead, SSNIT is exploring alternative management strategies, including the possibility of leasing out underperforming hotels to private investors as part of a broader plan to revive struggling investments and maximize returns for contributors to the national pension scheme.

Speaking on Joy News’ PM Express Business Edition, Mr. Afreh Biney stressed that reports suggesting SSNIT could dispose of its hotel assets are inaccurate, emphasizing that the Trust remains committed to preserving and improving the value of its investments.

“Let me assure the people of Ghana that we will not sell any of our hotel investments,” he stated.

According to him, SSNIT's hotel portfolio comprises both highly profitable assets and facilities that require significant intervention to restore profitability. He cited Labadi Beach Hotel as one of the Trust’s most successful investments, noting that the facility continues to deliver strong financial returns and consistent dividends to pension contributors.

“Labadi Beach Hotel is one of our best investments. In fact, they have consistently paid dividends year in and year out. Last year alone, based on 2024 numbers, they paid us ¢17.8 million in dividends,” he revealed.

Mr. Afreh Biney further disclosed that the hotel recorded impressive financial results, posting a profit before tax exceeding ¢67 million and a profit after tax of more than ¢50 million. Given its dividend payout ratio of 40 percent, he expects the hotel to deliver even higher returns in subsequent years.

“Clearly, if you go by their dividend payout ratio of 40%, they will pay higher than they did the previous year,” he said.

While highlighting Labadi Beach Hotel’s success, the SSNIT boss acknowledged that other assets within the Golden Beach Hotels Group—including La Palm Royal Beach Hotel, Elmina Beach Resort and Busua Beach Resort—continue to face operational and financial challenges.

To address these concerns, SSNIT has engaged consultants to develop a comprehensive five-year strategic blueprint aimed at turning around the fortunes of the hospitality group and improving its long-term viability.

“We advertised for consultants to tender and provide us with a business blueprint on turning those hotels around in five years. We are currently evaluating that tender,” he explained.

Despite the challenges, Mr. Afreh Biney said there are already signs of progress, particularly at La Palm Royal Beach Hotel, which recently recorded a profit after years of financial difficulties.

“La Palm last year, for the first time—in fact, we do not even remember the last time La Palm made a profit—made a profit. It may be small, ¢1.8 million, but at least bigger things start with humble beginnings. The turnaround process is beginning now,” he said.

As part of the restructuring considerations, the Director-General suggested that leasing some underperforming assets could provide a practical solution for reducing losses while ensuring continued investment in the properties.

Using Elmina Beach Resort as an example, he explained that SSNIT could potentially lease the facility to a private investor who would be responsible for managing operations, investing in maintenance and paying the Trust an agreed annual fee.

“Let’s pick Elmina. Elmina today makes losses for you. Elmina requires extra injection of fresh capital to turn around,” he explained.

“Let’s say you sit with an investor and lease Elmina out and say, this is the size of our investment. We are leasing it out for a period. Pay us ¢10 million every year. Run it, and if you make a margin, it is for you, but invest in the asset to ensure that it is maintained and kept in good condition.”

However, he was quick to clarify that no final decisions have been made regarding leasing arrangements and that SSNIT will await the recommendations of the consultants before determining the most appropriate management model.

“I’m not saying we have even gotten there. I’m just sharing some management models that could be adopted, but we would first have to wait and get the work done by the consultants,” he noted.

Mr. Afreh Biney also dismissed suggestions that SSNIT is considering bringing in a strategic investor for Labadi Beach Hotel, insisting that no such discussions are taking place.

“There is no, absolutely no conversation anywhere about Labadi Beach Hotel,” he stated.

He added that the hotel's strong financial performance places it in a favourable position to support future expansion plans, including efforts to increase room capacity and strengthen its position as one of Ghana’s leading hospitality destinations.

The SSNIT Director-General reiterated that preserving and growing the value of the Trust’s investments remains a key priority, assuring contributors that all decisions regarding the hotel portfolio will be guided by the objective of securing sustainable returns for pension beneficiaries.

“We will not sell La Palm,” he emphasized, reaffirming SSNIT’s commitment to retaining ownership of its hospitality assets while pursuing strategies to improve their performance and profitability.