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Enacy Mapakame-Business Reporter

Hospitality group, African Sun Limited’s revenue for the half year to June 30, 2022 surged 153 percent to $8,45 billion compared to the same period last year driven by higher business volumes and fi­rmer average daily rates at the back of increased demand.

During the half year period, hotel occupancy – at 41 percent – increased by 17 percentage points compared to the same period last year.

hairman Emmanuel Fundira said this was, however, 4 percentage points lower than the occupancy levels achieved over the same period in 2019.

The tourism and hospitality business is on a recovery path after the declines that were experienced following the outbreak of the Covid-19 pandemic, which resulted in some operators temporarily closing their facilities as economies the world over implemented lock down measures to limit the spread of the pandemic. 

Recovery has been sustained mainly by the domestic market.

“The group’s business continues to be predominantly domestic driven. However, we have also started to witness signs of recovery on the regional and international market front,” said Mr Fundira in an update for the period under review.

Foreign business contributed 15 percent towards the hospitality segment revenue, representing a 7 percentage point increase from the same period last year.

The hospitality segment, which is the key driver of the group’s revenues and pro­fitability, contributed 95 percent of the total revenue whilst the real estate segment contributed 5 percent.

Key contributors to the real estate segment revenues were residential stand sales at Marlborough Sunset Views as well as property consultancy revenue.

Profit for the period dropped 68 percent to $5,86 billion from $18,58 billion achieved during the same period prior year.

In terms of liquidity, the group is currently ungeared and had cash and cash equivalents balance of $4,67 billion as at 30 June 2022.

“The group is currently in discussions with local financial institutions, earmarked at establishing standby financing facilities for material hotel refurbishment projects that are in the pipeline,” said Mr Fundira.

The increase in the group’s inflation adjusted operating expenses (excluding depreciation), at 127 percent compared to the same period last year, trailed the 153 percent increase in revenue. According to African Sun, operating expenses increased mainly due to increase in business volumes and inflationary pressures which the group has also been experiencing even in US dollar denominated costs.

Going forward, the group will continue to monitor costs and implement various cost cutting initiatives while remaining upbeat that recovery of international business will continue into the second half of the year.

This comes as Zimbabwe, like many destinations across the globe, continues to witness encouraging signs of a much accelerated recovery to the pre-pandemic tourism arrival levels.

In spite of the current global economic and geopolitical challenges, the United Nations World Tourism Organisation (UNWTO) revised its outlook for 2022, projecting that international arrivals are now expected to reach 55 percent to 70 percent of 2019 levels.