adminbeen an exception.
Performance by tourism and leisure companies listed on the Zimbabwe Stock Exchange indicates that despite the rebound in tourism last year the market is still depressed.
Global travel grew by 5 percent last year, powered by emerging markets, with Africa recording an 8 percent growth.
However, these companies have shown great potential to turn around and return to profitability ahead of the expected boom in the tourism industry.
African Sun Limited chairman Tim Chiganze indicated that as the local tourism industry begins its peak season, his company is expecting to recover and the entire industry is also expected to register growth.
ASL, which posted a US$1,3 million loss for the first six months of the year says the renegotiated rental structures with property owners and positive improvement in revenue per average room is expected to reduce the group’s losses posted in the six months.
During the period under review, the pan- African group saw its revenue grow by 6 percent to US$27,74 million from US$26,06 million achieved in the previous period, on the back of a strong revenue growth recorded in Zimbabwe.
Occupancy for the group increased to 45 percent from 40 percent last year, while RevPAR and average daily rate recorded growth of 16 percent and 5 percent respectively compared to same period last year.
The performance of its regional operations shows that the group is not very far from turning the corner.
However, the performance of its shares on the local bourse has not been good and improved operations will bring back fundamental trading to its shares.
Zimbabwean operations continue to show growth, closing the period under review at an average occupancy level of 47 percent, up from 40 percent achieved in the same period last year.
This resulted in a 23 percent increase in RevPAR to US$37 from US$30 last year, as ADR grew by 8 percent.
The group said city hotels sustained higher occupancies of 63 percent compared to 59 percent of last year, resort hotels lagged behind at 35 percent, compared to 28 percent last year.
However, indications are that the group is expected to record more business and the sector continues to recover.
The loss-making resort hotels, which sustained earnings before interest, tax, depreciation and amortisation loss of US$729 000 are also expected to be profitable in the second half of the year.
In South Africa the group said occupancy in that country was affected mainly by the oversupply of rooms in the Johannesburg market, declining to 30 percent from 43 percent in the same period last year.
ASL is bullish about the newly opened Best Western in Lagos, with occupancies increasing since opening in October last year. However, Amber Tinapa was closed for redevelopment with effect from February this year, thereby affecting the hotel’s occupancies and consequently management fees receivable.
During the period under review, revenue from its retail arm, Hotelserve was depressed, falling by 20 percent.
This decline, compounded with the strong South African rand resulted in an EBITDA loss of US$92 333 (-1 percent margin).
Going forward, the group’s total recovery hinges on the US$10 million five-year loan, which they are using to refurbish its hotels. Afreximbank is funding the refurbishment exercise. The group says priority will be given to the relaunch requirements of the hotels operated under the Holiday Inn franchise.
And here is what I got from my email this week:
“The premeditated decision by Essar to build a slurry pipeline that pumps unprocessed iron ore to Beira from Zimbabwe is retrogressive. Zimbabwe needs investors that are able to add value to benefit to the wider economy.
“The basic foundation and concessions that the Government extended on the Essar- Zisco deal was supposed to be premised on the revival of Zisco
“Anything that attempts to circumvent value addition of the iron ore deposits within Zimbabwe is unfortunate. There would be huge loss of value for the country in VAT, labour, corporate tax and other downstream industries such as banking.
“The company will be no different from De Beers that was alleged to have shipped tonnes and tonnes of diamonds out of Zimbabwe under the cover of darkness for years, only for poor local Zimbabweans to uncover the veil of secrecy with poor sticks and shovels after De Beers had left?
“I hope our Government, in negotiating with Essar, has not been caught napping.”
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Online Reporter