daniel chigunwe
Business Writer
HOSPITALITY Group, African Sun Limited, says it anticipate a strong growth in occupancy in 2024 spurred by international tourist arrivals that continue to recover from pre Covid 19 pandemic levels.
In 2023, African Sun occupancy grew 52 percent, earning the group revenue per available room of US$57 million.
This comes as the United Nations World Tourism Organisation (UNWTO) estimates a 2 percent growth in worldwide tourist arrivals in the current year, above the 2019 levels, spurred by increased air connectivity and opening up of Asian markets.
The group indicated that recovery from Covid-19 has led to a notable return to normalcy in key source markets signaling a new dawn in the industry.
According to Afsun, the hotel will continue to leverage Meetings, Incentives, Conferencing, and Events (MICE) to anchor performance on the domestic front.
However, the group remains uncertain over a myriad of issues, particularly the persistence of currency instability locally, global inflation and rising oil prices, with the hotel company alluding that it could weigh down on spending patterns and demand over the forecast period.
“Looking at the year ahead, the UNWTO forecasts international tourist arrivals to fully recover to pre-pandemic levels in 2024, with initial estimates pointing to a 2 percent growth above the 2019 levels, underpinned by increased air connectivity and continued recovery of Asian markets and destinations.
“On the domestic front, we anticipate the yield on the growing demand for Meetings, Incentives, Conferencing, and Events (“MICE”) business, as well as benefits from several high-profile events, including the Zimbabwe International Trade Fair (“ZITF”) and the Victoria Falls Carnival, hosted at Elephant Hills Resort and Conference Centre,” said African Sun Limited chairman Constantine Chikosi in a statement accompanying the group’s performance for the year to December 2023.
He said the macroeconomic uncertainty around inflation and currency instability will likely persist but the group was fortunate to have the liquidity and financial flexibility to make prudent investments, aligning with its vision of ensuring a seamless and enjoyable guest experience.
Going forward, the hotelier indicated that it will have significant capital investments towards Information technology and hotel refurbishments and this is expected to set the stage for a sustainable growth trajectory for the group and enhanced returns for shareholders.
“Our cash deployment strategy mainly focuses on completing targeted hotel refurbishments to enhance guest experience. During the period under review, we continued to prioritise strategic capital allocation initiatives.
“This included the completion of the refurbishment of the remaining 46 rooms at Hwange Safari Lodge and the refurbishment of the public areas which is progressing well. The refurbishment of the public areas at Troutbeck and the Great Zimbabwe conference centre was also completed during the period under review.”
Operationally, the group posted US$3,74 million in operating profit.
The Group’s revenue closed the year at US$ 54, 73 million translating to a 30 percent growth against the comparable period driven by firmer Average Daily Rates (“ADR”).
Afsun’s Average Daily Rates (“ADR”) closed the 2023 financial year at US$110, 39 percent ahead of US$79 achieved during the comparable period attributable to changes in customer mix.
Hotel occupancies increased to 52 percent, 6 percentage points above 2022 performance.
Revenue per Available Room (“RevPAR”) increased by 58 percent to close the year at US$57 up from US$36 realised in the prior comparable period.
It, however, recorded a marginal profit after tax of US$0, 52 million attributable to turbulence in the macroeconomic operating environment as costs spiralled at a higher rate than revenues, compounded by material exchange rate losses.
Operating expenses, excluding depreciation, increased by 43 percent to US$27, 63 million from US$19,29 million in 2022 driven largely by exchange rate volatility, inflationary pressures and the crystallisation of expenses in USD as the economy continued to dollarise at a rapid pace.
Bongani Ndlovu