Shearwater Adventures, the leisure division of fast-food chain, Innscor International, is facing crippling viability problems because of reduced tourist arrivals.
The company is reportedly struggling to meet its financial obligations because of reduced earnings from tourism operations. Shearwater also faces a huge wage bill. The company is understood to be streamlining its activities to focus on those generating more income.
Innscor International managing director, Jeremy Brooke, confirmed that Shearwater had been seriously affected by the downturn in the tourism sector.
“The viability of Shearwater is under threat because there has been a huge decrease in the volume of foreign visitors,” said Brooke. He said the situation was impacting negatively on the company’s operations. “We are looking at ways to remain in business. We have had to discontinue the operations of the Balloon Company,” Brooke said. “Its contribution was insignificant compared to what we invested in the project.”
He also said Shearwater was shedding staff to reduce its unsustainable salary bill. “We are doing our best to keep most employees on the job but the whole sector is facing a downturn and it is impossible to retain everyone,” he said.
He said Shearwater had closed down most of its operations in Kariba and was mainly focusing on resuscitating the Victoria Falls operation. “Business in Kariba had become very low and we decided to dispose of it,” said Brooke.
He said the holding company was however investing in a food court in the town. “We are constructing a food court in line with our Exxomobile arrangement. We hope to have completed the project in the second quarter of 2005,” Brooke said. He said Innscor was now franchising its food outlets in the region because this was more profitable.
Brooke said franchising allowed customers to have more choice in quality brands. “It is not a new concept but it has become expensive to build food courts. We have realised that franchising them will open up the company’s market and at the same time allow our value brands to be available to all customers,” Brooke said.
He said due to the decrease in consumer disposable incomes, the business of running food outlets was declining. On the disposal of TV Sales and Hire, Brooke said they could not find a suitable partner to take up part of the shareholding. “We looked around and there was no suitable organisation which could buy TV Sales and Hire so we decided to discontinue the offer,” said Brooke. He said the company had no plans to dispose of TV Sales and Hire since it was recording a significant growth. “TV Sales has been growing significantly and we have no plans to dispose of it. It is amazing that the company’s cash sales are growing, showing that it is moving from credit to cash sales,” Brooke said.
Source: Shearwater struggles for business (30 July 2006)