African Sun sees growth in tourism

Harare – Hospitality group, African Sun Limited says the expansion of the Victoria Falls airport and runway in Matabeleland North province to accommodate larger aircrafts is expected to increase foreign tourist arrivals in the resort town.

In Matabeleland North, the group operates the Victoria Falls Hotel, the Kingdom Hotel and Hwange Safari Lodge.

In the five months to May, revenue for the group was US$14.09 million (23 percent down from last year) as a result of difficult trading conditions and reduced demand in the country signified by the negative inflation of -2.47 percent, the depreciation of the regional currencies, particularly the South African rand and change in Southern African Development Community (SADC) and African Union chairmanship from Zimbabwe, which resulted in one-off business that came the prior year.

Other reasons include  the occupancy that  was at 35 percent compared to 44 percent same period last year as room night sold declined by  22 percent and a reduction of 17 percent in operating costs from 2015.

Despite the reduction in revenues by 23 percent for the five months ending May 2016, African Sun achieved a loss of US$740 000 down from a 2015 loss of US$1.87 million.

African Sun Chief Executive Officer, Edwin Shangwa, says an increase in tourist arrivals was expected in the second half of the year.

“The expansion of Victoria Falls airport and runway to accommodate larger aircraft is likely to increase foreign arrivals in Victoria Falls. We anticipate an increase particularly during the peak season,” he says.

“Improved airline connectivity between Harare and Victoria Falls will influence domestic arrivals into these two destinations.”

It said business will continue to be supported by the resilient international market.

“Due to subdued revenues we have taken steps and we will continue to reduce costs to align to performance. H2 (Second Half Peak Season) is expected to drive recovery from the subdued H1 (First Half) performance.”

In April this year, African Sun shut down its loss-making hotels in and outside Zimbabwe and has since been undertaking major cost rationalisation measures to bring back existing operations to profitability.

Hotels closed include Amber Accra Hotel in Ghana and the local operation Beitbridge Express as well as other operations in Nigeria, Mauritius and South Africa. The closures were meant to halt cash drain from the profitable Zimbabwe operations. African Sun has changed its business model from a hotel operator to hotel Investment Company.

Source: African Sun sees growth in tourism (08/07/16)