Strong positive performance in the global tourism trends, increased activity in the domestic economy and subsequent increase in occupancy levels saw hospitality concern African Sun Limited (ASL) posting a 110 percent profit growth for full year 2018 to US$10,14m.
In 2017, the hospitality group posted a profit of US$4,8m.
The hospitality group’s revenue accelerated 32 percent revenue growth to US$68,5m from US$58,12m in the previous year while EBIDTA of US$17,13m was 78 percent above the previous year.
“Strong positive performance in the global tourism trends and increased activity in the domestic economy drove growth and improved profitability for ASL in 2018,” said ASL chief executive Edwin Shangwa.
He said the growth in revenues and subsequent profits was augmented by an increase in occupancy levels from 52 percent in 2017 to 59 percent in 2018 despite the second half of the year being characterised by multiple economic constraints such as input price increases and hard currency shortages.
The growth in revenue and profit was driven by a positive response from all source markets, where growth in all market segments was seven percent and above.
Shangwa said the Victoria Falls area contributed significantly to international traffic, as the destination saw a number of regional and international airlines increase frequencies and or grow capacity in response to the increased demand in the destination.
He said growth was also spurred by a 17 percent growth in average daily rate to US$109 last year from US$93 recorded in the previous year as hotels continued to yield and manage input costs simultaneously.
Shangwa said the profits realised in 2018 “are going towards adding value for all the stakeholders through product improvement projects across the group.”
He said the first two months of 2019 were weak compared to the same period last year with regards to occupancy as January was affected by the unrest experienced. This resulted in cancellations of bookings, mainly from local companies and in some cases postponement without concrete future dates.
The February Monetary Policy Statement pronouncements, Shangwa said, slowed down domestic economic activity as companies and individuals required time to adjust to the new macro situation.
This had a combined effect of shrinking the revenues realised in those two months compared to the same period in 2018.
In the outlook, the group anticipates the business to improve supported by the positive changes and sentiments brought about by the Transitional Stabilisation Programmed.