African Sun anchors growth on US$25m facelift

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TINASHE MAKICHI

Hospitality group, African Sun Limited (ASL), has anchored its future growth on a US$25m facelift of its properties. Under the exercise, the Group will refurbish its properties in Nyanga, Kariba, Victoria Falls, Hwange and Masvingo.

According to the Group’s company secretary, Venon Musimbe, “African Sun has taken an initiative to revamp its products through a number of refurbishment programmes for most of its hotels at an estimated cost of US$25m”.

The Group has already commenced the refurbishment of Troutbeck Resort, Carribea Bay Resort, and Great Zimbabwe Hotel albeit at a much slower pace as funding commitments and long-term planning have been hampered by the government’s 20% foreign currency surrender, as well as the 30 day liquidation period.

African Sun is also in the process of completing mock-up rooms for Hwange Safari Lodge and the Victoria Falls Hotel, the rollout of which is expected in the first quarter of 2020. In the quest to broaden its reach, the Group added high end Camp Sites at Great Zimbabwe Hotel and Carribea Bay Resort in the third quarter of this year.

“This new product, known as “glamping”, because of the more luxurious feel compared to a standard campsite has already hosted the maiden group of guests at Caribbea Bay Resort in October 2019,” Musimbe said. “The market is excited about this new development and we anticipate an increase in foreign arrivals at these properties as we go into 2020. An official launch of this product will be announced to the market soon. The launch will include a completed Great Zimbabwe Hotel refurbishment,” Musimbe added.

Occupancy for the third quarter closed at 51%, representing a 24-percentage point decline from the 75% recorded in the same quarter last year. This is represented by a 32% decline in room nights sold from 108,448 reported in the comparable quarter last year to 73,929 this year.

Business mix for the third quarter with regards to room nights was 59% local and 41% foreign. The revenue split for local and foreign for the same quarter was 46% and 54% respectively. For the nine months year-to-date, occupancy closed at 47% representing an 11-percentage point decline from the 58% recorded in the same nine month period last year. This decline represents a 19% drop in room nights sold to 206,454, from 253,661 reported in the same period last year.

The decline was across all its markets, with domestic and foreign room nights reduced by 20% and 26% respectively.

“The local market was negatively affected by the January protests and low disposable incomes,” Musimbe said. “Of concern are clear indications that we are in a recession.”

In comparison, the international market has been affected by the general slowdown in world travel by 3%, as well as random actions of civil unrest like the Hong Kong strikes which affected our arrivals in the Victoria Falls destination, in particular for Kingdom Hotel at Victoria Falls.

In the outlook, Musimbe said the local market would remain subdued in the short to medium term given the current challenging economic environment.