African Sun hotel occupancy jumps 31pc

28 Apr, 2022 - 00:04 0 Views
African Sun hotel occupancy jumps 31pc

eBusiness Weekly

Michael Tome

Business Writer

LISTED hospitality concern, African Sun Limited (ASL) recorded an upturn in 2021 hotel occupancy levels driven by a fairly active economy as lockdown measures receded.

The hotel group’s occupancy levels surged to 31 percent from 23 percent posted in 2020 translating to an eight percent movement in the positive.

Nonetheless, the occupancy levels attained in the course of 2021 remain lower than the 40 percent levels that the hotelier used to reach in the pre-pandemic era.

To a greater extent, this is because traditional source markets remained shut for the better part of the year, international arrivals led to an eight percent contribution to the group’s revenue which is a lesser than 30 percent contribution before the pandemic wreaked havoc.

However International tourism showed signs of a rebound in the year as some destinations started easing travel restrictions owing to advanced vaccination rollouts in many parts of the world.

Revenue per available room (RevPar) improved in the year to $3 408 from 2020’s $2 905 translating to a 17,3 percent growth, while total RevPar grew to $6 907 from the prior year’s $5558 all in inflation-adjusted terms.

Recovering room occupancy in the course of 2021 consequently spurred the group’s profits to close the year with an inflation-adjusted profit of $9,7 billion from a $2,4 billion loss in 2020.

“Improved performance reflects the impact of a more open and active economy as lockdown restrictions were substantially relaxed in 2021 compared to the period during the height of the pandemic in 2020,” said African Sun Limited in full-year financials to December 2021.

“Foreign source markets were largely closed for the greater part of the year, with foreign business contributing only 8 percent compared to 14 percent in 2020 towards hotel revenue which is significantly lower than over 30 percent contribution achieved during pre-Covid 19 era.”

Consequently, in the course of 2021, ASL’s revenue posted a 48 percent growth in inflation-adjusted terms to close the year at $4,3 billion from 2020’s $3 billion.

According to ASL, 12 percent of the group’s revenue is attributable to the performance of Dawn properties limited, a subsidiary acquired by the group in 2021.

“Key contributors to dawn revenues include 22 residential stand sales at Marlborough Sunset Views from 17 in 2020 as well as property consultancy revenue.”

Hotel room operating expenses in the said period surged by 24 percent to $2,44 billion from $1,97 billion, while the group’s operating expenses increased 23 percent from 2020.

In the outlook, ASL highlighted that it remains highly skeptical and will be looking closely at developments regarding the Covid 19 situation, particularly on the rate of vaccination as well as the effects of the geopolitical tensions in Eastern Europe.

The hotel concern said it anticipated that the Covid-19 situation will continue to improve and believes most self-lockdown restrictive measures will be further relaxed.

“We continue to be optimistic about the future of the group and we are confident that our business model and strategy will put us in a strong position to succeed. ‘

Among other things, the key to our success will be managing costs, disposal of no core assets, and deploying proceeds from the same to refurbish our hotels,” said African Sun.

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