African Sun Limited targets foreign tourists
By Shame Makoshori
Zimbabwe’s largest hotel chain, African Sun Limited (ASL), is planning to embark on an aggressive promotion in the domestic and foreign markets to boost occupancies and increase revenue after turnover from continuing operations slowed by 12 percent to US$43,6 million during the year to December 31, 2016.
ASL had reported revenue of US$63 million during the prior comparative period.
During the review period, revenues were affected by a slowdown in arrivals from South Africa after the rand lost value against the United States dollar.
The listed group, which bounced back to profit during the review period, has benefited from a management contract signed with Legacy Hotels of South Africa in September 2015.
Chairman, Herbert Nkala, said in a statement accompanying the group’s results that ASL would leverage on social media and online platforms to reach out to a wider audience, while working with international brands to deliver better service.
“(ASL will) drive volume growth through specific and targeted promotions both in the domestic and international market, harness and fully utilise e-marketing, social media and online platforms for a wider market reach, reduce cost of sales and operating overheads. We are further encouraged by the optimism of the tourism industry arising from the completion of the Victoria Falls Airport…which will lead to increased foreign arrivals and improved occupancy in our Victoria Falls properties,” Nkala said.
ASL reported a US$4,81 million profit after tax, from a US$8,3 million loss reported during the prior comparative period in 2015.
The group said room occupancy levels declined during the review period to 44 percent, from 48 percent the previous year.
It said arrivals would be underpinned by developments in the prime resort town of Victoria Falls, where a massive airport expansion has started attracting airlines, which are set to add at least 80 000 more tourists per annum.
In Victoria Falls, the group operates Elephant Hills Resort, the Kingdom at Victoria Falls, as well as a 50 percent stake in Victoria Falls Hotel, which is jointly owned with Meikles Limited.
Other hotels under the ASL stable include Holiday Inn in Harare, Hwange Safari Lodge, Monomotapa Hotel in Harare, the Great Zimbabwe Hotel in Masvingo, the Amber Hotel in Mutare, as well as the Troutbeck Resort in Nyanga.
The rebound came a year after ASL contracted Legacy Hotels to manage Elephant Hills, Kingdom Hotels, Monomotapa, Troutbeck and Hwange Safari Lodge under a 2015 deal that was expected to see some of the facilities given a facelift.
During the review period, ASL’s operating expenses declined by 19 percent to US$27,9 million, compared to US$43,4 million during the prior comparative period.
Revenue per room dropped to US$41 during the period under review, from US$45 during the same period the previous year.
ASL generated US$3,03 million in other income; it received $28 000 in bond notes as an export incentive from the Reserve Bank of Zimbabwe.
It also generated US$1,93 million profit from the disposal of its PCC subsidiary, US$28 000 profit on disposal of fixed assets and US$23 000 from insurance claims.
Nkala said ASL settled a dispute over the ownership of 24 timeshare units at Troutbeck and another 11 at Caribbea Bay Resorts in Kariba, which had been under dispute with Dawn Properties Limited.
“In the settlement, Dawn Properties Limited agreed to pay African Sun Limited the sum of US$1 415,135. The net book value of assets was US$1 370 505 and a gain of US$0,045 million was realised,” said Nkala. Financial Gazette
