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HOSPITALITY group, African Sun Limited (ASL), has set aside US$12 million for the refurbishment of its hotels across the country over the next two years.
The project is set to upgrade the facilities to world-class standards with some of the funds sourced from borrowings.
With 10 hotels across the country, ASL became the first hospitality group to list on the Victoria Falls Stock Exchange (VFEX) this year, as the group seeks to widen capital base to finance equity and capital projects, among other things.
In its 2022 annual report, ASL chairman, Dr Emmanuel Fundira, said some of the hotel groups’ facilities are being upgraded while others have completed the process.
For instance, during the third quarter of 2022, it completed the refurbishment of 47 rooms and the kitchen at the majestic five-star, Victoria Falls Hotel.
The group, together with its partner, Meikles Limited, invested approximately US$5 million towards the refurbishment of the property.
In the period under review, the group also completed the refurbishment of all 70 rooms at Troutbeck Resort during the last quarter of 2022.
Work on the Hwange Safari Lodge rooms refurbishment commenced in August 2022 and, as at the date of the report, 56 rooms had already been completed with the remaining 44 rooms expected to be completed before the middle of the year.
Dr Fundira said the refurbishment of the remaining rooms at Great Zimbabwe Hotel, including the conference centre was at an advanced stage and is expected to be complete by mid-year. He said preparatory work to upgrade all hotels to world class standards is ongoing.
“While we are proud of the hotel refurbishments that we are currently carrying out and those that we have completed, we acknowledge that the remaining hotels are also due for upgrades. In this regard, the group has commenced preparatory work to upgrade all our hotels to world-class standards,” he said.
“We estimate spending approximately US$12 million within the next year or two, depending on business and economic performance to be funded from our own cash position and borrowings,” said Dr Fundira.
He said the cash deployment strategy remains unchanged, focusing mainly on targeted capital expenditure on hotel assets in order to enhance the experience of our valued guests and to preserve value.
Revenue for the year under review was $31,8 billion, which reflects a 114 percent increase compared with last year. Group revenue for the year ended 31 December 2022 amounted to US$53.2 million, a 62 percent growth from the prior year.
This was on the back of a 15 percent increase in occupancy and firmer average daily rates. Occupancy at 46 percent was two percent below the 48 percent that was achieved in 2019, the last normal trading year before Covid-19.
Dr Fundira said 60 percent of the group revenue was generated in foreign currency. Hotel revenue was split 81 percent and 19 percent between domestic and foreign arrivals respectively.
“The improved performance reflects the recovery of both domestic and foreign business. The city and country hotels recorded 58 percent occupancies (2021: 45 percent) whilst the resort hotels, which have not fully recovered from the impact of Covid-19, achieved an occupancy level of 36 percent (2021: 19 percent),” he said.
“The hospitality segment contributed 98 percent of group revenue while the real estate segment contributed two percent.”
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