Chobe Holdings closes lodges due to pandemic pressure

Staff to be placed on un- paid leave from March 1st

One of the leading tourism players in Botswana, Chobe Holdings Limited has, due to the effects of COVID- 19, decided to close all camps and lodges once the last few guests leave in a few days’ time, with the exception of Shinde, the Sedia Riverside Hotel and possibly, Camp Moremi.

Chobe Holdings Limited owns and operates eleven eco- tourism lodges and camps on leased land in Northern Botswana and the Caprivi Strip in Namibia through its subsidiaries. The holding company operates under two well- known hospitality brands: Desert and Delta Safaris and Ker and Downey Botswana.

“Following my notice to you all dated the 26th November 2020, I wish to bring to you all the following information with regard to the COVID- 19 pandemic, its effect on our Company and our lives. Unfortunately, the New Year has not brought good news, COVID- 19 infections have spiked all over the world with a new much more virulent mutation causing widespread lock downs.

It is also anticipated that domestic tourism potential will largely disappear during the next two months, this situation has caused us to review how we should go forward whilst attempting to preserve the Company’s cash resources to ensure our survival for as long as possible into the future,” Jonathan Gibson, Chief Executive Officer and Deputy Chairman of Chobe Holdings Limited said in a notice to all staff members.

The CEO explained that they will rotate some staff in and out to maintain the company’s properties and to ensure that they are properly secured. I hope that the vaccines currently being rolled out in much of the world will allow people to start travelling in safety within the next few months, this will hopefully allow us the opportunity to reopen selected properties later this year, thus bringing most of our staff back into full employment, expressed Gibson.

“You will however recall that in my last correspondence to you, I discussed the government wage subsidy, that subsidy was offered initially for three months then a further three months. There is currently no indication from government as to whether they will continue after the last payment. If the tourism industry receives no further support, and the lockdowns on travel continue, the consequence for your Company and indeed the whole tourism industry will be dire,” he said.

Gibson explained that they have reviewed their cash situation and found that existing financial resources allow them to continue paying reduced salaries till and including the end of February this year.

“If further funding cannot be found all staff may have to, from 1st March, be placed on unpaid leave with exception of the skeleton staff retained to look after our properties as alluded to above.

I wish I could convey to you all better news, but feel I must tell you how it is. Rest assured however, that your Directors are doing all in their power to preserve the Company so that when conditions do improve, we will be able to welcome you all back in the workplace and when we all have the opportunity to restart our lives,” the CEO told staff.

According to Chobe Holding Limited unaudited abridged financial statements for the half year ended 31st August 2020; Corporate announcement- Earnings published on its website October 30th 2020, a 92 percent decrease in revenue was realised with a 64 percent decrease in operating costs.

There was a 139 percent decline in operating profits and a 145 percent decline in profits after tax. Cash and cash equivalents declined to P33.6 million.”

The business model of Chobe Holdings is based almost totally on high- end wildlife tourism. Prior to the arrival of COVID- 19, the group was anticipating its best year ever in terms of already confirmed bookings. “Early in the half, however, the onset of the COVID- 19 lockdown brought our business to an almost complete halt from that date onwards. Revenues collapsed overnight, but many expenses remained in the form of payrolls, the cost of disposing of perishable food and beverage items, lease fees to local and central government and the necessity to secure and maintain properties and equipment in the hope of a resumption of business in the not too distant future,” said the company.

The government Economic Recovery and Transformation Plan 2020/ 21- 2022/ 23 presented last year stated that as a result of COVID- 19, the travel and tourism sectors are likely to experience fundamental changes in their operations due to measures taken globally to combat the pandemic, notably restrictions on international travel and entry to different countries.

It indicates that these sectors are likely to suffer a prolonged adverse environment and hence a long- term negative impact.

“It will take some time, probably into 2021, for foreign tourists to travel to other countries for leisure in significant numbers.

Most tourism operators in Botswana are assuming that there will be zero international business for the rest of 2020. While that remains the case, economies of places such as Maun and Kasane will be adversely affected as hotels, restaurants and other tourismrelated economic activities will remain closed or operating at very low levels of capacity utilisation.”