Meikles weighs tourism options as profits fall
MEIKLES Limited board chair John Moxon yesterday said the diversified group was reviewing the future of its hospitality business in Zimbabwe after profits plummeted during the year ended March 31, 2021, underpinned by the COVID-19 pandemic.
The Meikles tycoon unveiled a string of proposed structural changes at the Zimbabwe Stock Exchange (ZSE)-listed conglomerate, but appeared to be making serious assessments before deciding the future of Victoria Falls Hotel, a hospitality industry gem that overlooks the world’s acclaimed waterfalls.
Victoria Falls Hotel escaped disposal when the group sold Meikles Hotel in Harare in a US$20 million deal about a year ago.
Subsequent to the transaction, the COVID-19 pandemic hit the globe, grounding travel as governments raced to implement hard lockdowns and manage the health crisis.
“The status of the hospitality assets is yet to be decided, but a strategy to unlock and enhance shareholder value will be determined,” Moxon said in a commentary accompanying the financial statements.
“It is envisaged that Meikles Limited will focus on the retention of its investment in retail, primarily supermarkets,” Moxon added.
The group’s hospitality operations posted a $122,7 million loss during the review period, from a $629,2 million profit during the comparable period in 2020, as international tourism and travel suffered due to the pandemic.
“The Victoria Falls Hotel reopened in November 2020 following the relaxation of restrictions by authorities. The clientele were mainly local and regional guests. The recovery of international travel and tourism hinges on a variety of factors including vaccination roll out by countries. Meanwhile, the planned renovations of the hotel have commenced,” Moxon said.
Last week, African Sun Limited,, which jointly owns Victoria Falls Hotel with Meikles, said headwinds confronting Zimbabwe’s tourism sector could mutate into fierce storms in the months ahead as markets fight to keep afloat in the midst of the COVID-19 outbreak.
Signs of potentially brutal phases of the crisis were visible during the first quarter when global arrivals tumbled 83%, the ZSE-listed ASL said, referring to a period when governments rolled out fresh painful measures to tackle the COVID-19 third wave through hard lockdowns.
The global write-downs were bad news for Zimbabwe, which had hoped arrivals would pick up again and offset a 90% arrivals plunge last year, which cost the industry over US$1 billion and destroyed 25% of its staff complement, according to official data.
This represented about half of the US$2 billion average annual tourism revenues, becoming the worst such bloodbath in 40 years.
In a trading update for the five months ended May 31, 2021, ASL, one of Sadc’s most adventurous leisure enterprises until its African ambition suffered setbacks in 2014, said while it was designed to ride out of calamities, it could not rule out an escalation.
“According to United Nations World Tourism Organisation Tourism Barometer, international tourist arrivals for the first quarter of 2021 declined by 83% compared to 2020.
“The outlook remains cautious due to hindrance in the resumption of international travel driven by new virus outbreaks accelerating the third and fourth waves, continued lockdowns and travel restrictions by major source countries, delays in vaccine distribution and rollouts as well as resistance to vaccinations.
“Given the strength of our systems and dedication of our people, we believe we are well positioned to navigate this crisis and ultimately recover stronger when the world begins to travel again.”
The hotelier added: “The spreading of the COVID-19 mutant variant coupled with slow vaccine roll out programmes in the region has impacted negatively on arrivals into the region. The third wave in South Africa is of concern as it negatively impacts both international and regional arrivals”.