African Sun rolls out US$25m revamp programme

HOSPITALITY group, African Sun, says it has embarked on a rehabilitation programme for most of its hotels across the country at an estimated cost of US$25 million.

In a trading update for the third quarter ended September 30, 2019, the hospitality concern said:

“The group has taken an initiative to revamp its product offering through a number of refurbishment programmes for most of the hotels at an estimated cost of US$25 million.”

The hotel group said it has commenced the rehabilitation of Troutbeck Resort, Carribea Bay Resort and Great Zimbabwe Hotel although at a much slower pace due to funding commitments and long-term planning.

African Sun said the funding commitments and long-term planning have been hampered by the 20 percent foreign currency surrender, as well as the 30-day liquidation period.

It said it was presently working to complete mock-up rooms for Hwange Safari Lodge and The Victoria Falls Hotel, the rollout of which is expected in the first quarter next year.

In the quest to broaden its reach, the group said it added high-end camp sites at Great Zimbabwe Hotel and Carribea Bay Resort during the quarter under review.

“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.

“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, which launch will include a completed Great Zimbabwe Hotel refurbishment,” said African Sun.

During the period under review, hotel occupancy closed at 51 percent representing a 24 percentage points decline from 75 percent recorded in the comparable quarter last year.

The drop in occupancy rate was represented by a 32 percent 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 percent local and 41 percent export.

The revenue split (in historical terms) for local and export for the same quarter was 46 percent and 54 percent respectively.

For the nine months year-to-date, occupancy closed at 47 percent representing an 11 percentage points decline from 58 percent recorded in the same ninemonth period last year due to reasons aforementioned.

“This decline represents a 19 percent drop in room nights sold to 206 454 from 253 661 reported in the same period last year.

“The decline was across all our markets, with domestic and export room nights reducing by 20 percent and 26 percent respectively.

“The local market was negatively affected by the January protests and low disposable incomes,” said African Sun.

On the outlook, the hotel group said the prevailing turbulent economic environment makes it difficult to forecast business performance.

“Our forward bookings up to the first quarter of 2020 are marginally below the 2019 levels, reflecting the difficult environment we are trading in.

“The local market will remain subdued in the short to medium term given the current challenging economic environment.

“We remain cautiously optimistic of our key foreign source markets given their own economic challenges, with the United Kingdom likely to still be dealing with Brexit, and the United States of America in elections mode,” it said. — @ okazunga