daniel chigunwe
Nelson Gahadza
Hotelier, African Sun, says discontinued operations and operational costs that escalated faster than revenue, resulted in the group’s loss after tax of US$1,81 million in the interim period to June 2023.
The company, in its half-year financials, said the loss for the period was also exacerbated by a challenging macroeconomic environment.
Chairman Constantine Chikosi, said operating expenses excluding depreciation, amounted to US$13,91 million, a 36 percent increase compared to the prior year.
“This was driven by inflationary pressures and increased volumes, resulting in higher variable costs. The group is actively monitoring and implementing cost-saving initiatives,” he said in a statement of the financials.
Chikosi said the discontinued operations incurred a loss of US$0,75 million, which contributed to the group’s loss position.
“This loss primarily included property and equipment impairments following the closure of the Kingdom Hotel in Victoria Falls,” he said.
However, group revenue for the period rose by 2 percent to US$22,36 million compared to US$21,93 million in the same period last year.
Chikosi said this was driven by higher business volumes, with hotel occupancy increasing by 5 percentage points to 46 percent compared to 41 percent in 2022.
In terms of profitability, earnings before interest, tax, depreciation and amortisation (“EBITDA”) for the half-year period, reached US$2,48 million, which was lower than US$18,92 million in 2022.
Chikosi said the group maintains a strong position, with no outstanding debt and cash and cash equivalents totalling US$6,98 million as of June 30, 2023.
“We are in discussions with local financial institutions to establish standby financing facilities for significant hotel refurbishment projects in progress,” he said.
He said the company’s mission to provide exceptional hospitality experiences that guests love, remains unwavering.
“We are focused on capital allocation for targeted hotel refurbishments to enhance the guest experience.
Progress continues in this regard, with the refurbishment of the remaining 46 rooms at Hwange Safari Lodge nearing completion,” said Chikosi.
The company, Chikosi, said expects the recovery of international arrivals to persist, especially as “we” enter the peak summer season.
The United Nations World Tourism Authority’s (UNWTO’s) scenarios for 2023 anticipate international tourist arrivals reaching 80 to 95 percent of pre-pandemic levels.
Chikosi said on the domestic front, the company welcomes government efforts to stabilise the macroeconomic environment.
“We anticipate a resurgence in conference business as controlled spending resumes post-elections, following significant occupancies from election-related activities after June 30, 2023,” he said.
He noted that on the property front, the company is developing an additional 55 stands in Marlborough Sunset Views, aiming to tap into the flourishing residential property market.
According to the UNWTO, the international tourism sector is displaying resilience in its recovery from the pandemic, despite enduring significant economic and geopolitical challenges.
The UNWTO World Tourism Barometer shows that global international arrivals reached 80 percent of pre-pandemic levels in the first quarter of 2023.
During the period in review, this recovery stimulated an increase in export revenue contribution, which rose from 20 percent to 25 percent of total hotel segment revenue.
Bongani Ndlovu