ASL posts marginal revenue growth
ROBIN PHIRI
African Sun Limited, a publicly traded hospitality group, recorded a marginal 2% increase in overall revenue to US$23.53m in the second quarter (Q2) to June 30, 2025, driven by higher Average Daily Rates and growth in the Real Estate segment, despite a challenging hotel market that saw occupancy levels drop by six percentage points.
The company’s performance comes after a difficult first quarter, during which hotel revenues were depressed by reduced foreign expenditure, particularly from US-funded NGOs, tight local liquidity, and government monetary measures affecting conferencing activity.
According to African Sun chairman Lloyd Mhishi, the second quarter put the group on a recovery trajectory, with notable improvements in government activity and local currency liquidity boosting hotel revenues in ZWL terms.
“Total rooms, food, and beverage revenue increased from US$9.1 million in Q1 to US$14.2m in Q2, an increase of US$5.1m,” Mhishi said.
“Overall revenue increased marginally by 2% to US$23.53m, driven by a 13% increase in Average Daily Rates (“ADR”) on hotel segment revenues and an increase in Real Estate segment revenues. The hotel revenues were subdued due to a six -percentage-point drop in occupancy as a result of reduced NGO and Government business.”
However, Mhishi noted that operating expenses, excluding depreciation, rose 7% to US$21.36m from US$19.98m in 2024.
This was largely due to a growing workforce, higher occupancy costs from revised council rates and taxes, increased investment in repairs and maintenance to enhance the guest experience, and rising IT expenses linked to the company’s digitalization program.
“Profitability of the hotel segment has remained a challenge due to the adverse operating environment, characterized by high operating costs, frequent power outages, and poor road infrastructure to key tourist destinations such as Victoria Falls, Hwange, and Kariba.
Most of the Group’s hotels are yet to be refurbished, and this has limited revenue growth, especially on leisure business,” he added.
Looking ahead, African Sun expects a significant rebound in international travel and conference tourism, driven by strengthened domestic demand, the launch of the USD5 billion Tourism and Hospitality Industry Policy (2025–2030), and a more favorable regulatory landscape, coupled with the continued rollout of a liberalized ZWL pricing framework.
“With ongoing challenges from evolving Government policies, inflation, currency fluctuations, and liquidity constraints, our Management team is prepared to adapt and respond to these dynamics, prioritising business resilience and agility,” Mhishi concluded.
