The Social Security and National Insurance Trust (SSNIT) says its decision to sell 60% stake in a number of its hotels was to deal with the substandard returns the investments in the hotels were yielding.

It noted that despite the huge investments made in the hotels, they keep making consistent losses, with frequent requests for maintenance, call on SSNIT to fund such maintenance, operational activities and workers emoluments; no payment of dividends, among other things.

The aforementioned had influenced the decision of the Trust to sell the hotels, as part of measures to revive them.

Addressing pressmen yesterday, the Director General of SSNIT, Kofi Bosompem Osafo-Maafo, said to help solve this issue, they sought a strategic investor to salvage the situation after all other means failed.

“I don’t think anyone running an investment funding in the world would be sitting and earning substandard returns.. we have to address the issue,” he said.

He added, “We’ve been through quite a lengthy process to do so. Bear in mind, we’ve also tried having external management companies running the SSNIT hotels and that hasn’t resolved the problem either. So, for us, we look at it two-fold: that we are looking to resolve a problem and do so with the introduction of a strategic investor, and we outlined the reasons there.”

Sharing a track record of the hotels, Mr Osafo-Maafo disclosed that La Palm Royal Beach Hotel made losses in 11 out of its 14 years of operation, and had not paid dividends. Its average return on equity from 2012-2017 has been -4.2%.

Elmina Beach Resort made losses in nine out of the past 14 years of operation. It has also not paid dividends, and its average return on equity is negative 4.8% for the period 2010 to 2017.

Similarly, Busua Beach Resort made losses in nine out of 14 years of operation, and has not paid dividends. The average return on equity is negative 31.7% for the period 2010 to 2017.

Ridge Royal Hotel made losses in all eight years of operation. The average return on equity is negative 33.1% for the period 2016 and 2017, and has had a negative shareholders equity position since.

Labadi Beach Hotel made losses in two out of the past 14 years. It has consistently paid dividends over the years. However, the average return on investment for was 1.7% from 2012 to 2017, and has averaged 5.2% for the period 2012 and 2022.

The SSNIT Director-General further maintained his outfit was guided by its objective to optimise overall returns, as the current profits from the hotel were considered inadequate.

“We want to maximize what we get out of it, and the question that I asked somebody the other day is if you were selling your car or even your house, if you were selling your house, you’d make an attempt to actually paint it.

“You wouldn’t wait for your car to be put on stones and then say, now this is the time to sell it. You make it look good. There’s no reason why if a business is doing well and we seek to maximise capital from its to invest elsewhere, we shouldn’t do so.”