eBusiness Weekly
Enacy Mapakame
Hospitality group, African Sun Limited, is scheduled to conclude its US$4,2 million hotel upgrades during the second quarter of the year.
The group committed millions of dollars on a hotel upgrade exercise to enhance the ambience of its hotels at a time the group and the country are looking at cashing in on the anticipated increased travel following the relaxation of Covid-19 restrictions that affected the sector as economies imposed travel bans that saw hospitality groups temporarily close some operations.
The refurbishments started in 2021 and the group has indicated one of its focus areas is enhancing guest experience and consolidate its market share.
Currently, the upgrades include the refurbishments of 100 rooms at Hwange Safari Lodges.
“The group anticipates completing the US$4.2 million Hwange Safari Lodge 100 rooms refurbishment during the second quarter of the current year,” said company secretary Venon Musimbe in a trading update for the quarter to March 31, 2023.
Hwange is expected to start recording increased numbers in tourist arrivals following the launch of direct flights to the area by Fastjet.
The group is also banking on the election period to boost numbers and hotel occupancies.
Chairman, Dr Emmanuel Fundira, acknowledged that while the company remains confident about its future prospects, its outlook is dependent on the political landscape prevailing in Zimbabwe ahead of the 2023 harmonised elections as well as the evolution of the geo-political tensions in Ukraine, and the local and global macro-economic conditions.
Zimbabwe is headed for elections on the second half of the year, which will have an impact on businesses.
“While we remain confident about African Sun’s future prospects, our outlook is to a greater extent dependent on the political landscape prevailing in Zimbabwe ahead of the 2023 harmonised elections,” said Dr Fundira adding the group was also looking at increased volumes spurred by the election, which will benefit its hotels that are dotted across the country.
African Sun also expects international tourism to consolidate its recovery in 2023, underpinned by pent-up demand, particularly from Asia and the Pacific as destinations and markets open up.
Benefits from China, following the lifting of the zero Covid -19 policy are, however, expected to trickle to the rest of the world at a slow pace as airlines and travel agencies scale up capacity.
According to the United Nations World Tourism Organisation (UNWTO), over 900 million tourists travelled internationally in 2022, double those who travelled in 2021 albeit still 37 percent lower than in 2019.
Locally, the Zimbabwe Tourism Authority (ZTA) reported that the country saw a 165 percent increase in tourist arrivals to 693,498 from 261,415 in 2021 during the nine-month period to 30 September 2022.
Meanwhile, the group experienced depressed business volumes for the first quarter to March 31, 2023 as occupancy closed the period at 39 percent, which was a decline of 3 percentage points from the same period last year.
City hotels closed at 51 percent compared to 56 percent during the same period last year while resort hotels reported occupancy levels were at 23 percent from 26 percent in the same period in the prior year.
Due to the reduced business volumes, total revenue for the quarter stood at US$ 7,9 million, which was down 2 percent from US$8,02 million recorded during the same period last year due to depressed business volumes.
Revenue per available room was up 2 percent on prior year comparable while average daily room rate rose by 10 percent.
The macro-economic environment during the quarter was not easy but continued to be characterised by challenges ranging from inflationary pressures to foreign exchange rate volatility.
The Zimbabwe dollar liquidity crunch persisted during the quarter under review, which combined with other factors led to the economy being substantially US dollar driven.
Indications are that approximately 76 percent of transactions in the local economy are now being conducted in US$.
As a result, the group witnessed its revenue and expenditure notably skewing toward US$, with monthly averages of 60 percent and 40 percent of the group’s revenue being earned in US$ and Zimbabwe dollar respectively.
Despite the economic challenges, the group is upbeat of improvements in occupancies driven largely by election business and remaining “pent-up” demand arising from overdue events and conferences.
Additionally, there are already improvements seen as businesses start drifting towards normal travel patterns including a perceptible acceleration in international travel, particularly for the Victoria Falls hotels.
