10-09-19 by Spotlight Zimbabwe

Zimbabwe hoteliers count the cost of chaos

 

Memory Mataranyika 

Zimbabwean hoteliers are counting the losses from business disruptions caused by demonstrations earlier this year, with African Sun – which operates hotels in Victoria Falls and Harare – saying foreign occupancy levels are down 19%.

Zimbabweans staged violent demonstrations in January after the government hiked fuel prices. Government sent in security forces to crack down on the protests, which resulted in multiple deaths. Police again stopped anti-government protests by the opposition Movement for Democratic Change (MDC) in August this year.

Alex Makamure, chair of African Sun, said on Friday that violent demonstrations and stayaways had led to cancellations and deferred bookings. Local occupancy levels for the group’s hotels were 10 percentage points lower for the six months to the end of June.

“The first quarter was impacted by the violent demonstrations and stayaways, which led to cancellations and deferred bookings.

“Resultantly, occupancies dropped to 45% in the period under review compared to 55% in the 2018 comparable period,” said Makamure.

This was in addition to other economic challenges that hobbled the tourism industry, including policy reforms that gave rise to currency changes, high inflation rates, and an escalation in electricity load shedding, as well as reduced aggregate demand across all sectors.

Despite a drop in occupancy – which closed at just 45% – African Sun did post a revenue increase to ZWL79.13 million, with a mix of 55% local and 45% export.

“Room nights dropped by 16% to 132 525 from 158 210 reported last year. The decline was across both our markets, with domestic and export reducing by 7% and 19% respectively,” added the company.

Forex

Both African Sun and rival hotelier Rainbow Tourism Group (RTG) are banking on their businesses’ forex generation capacity to continue investing in upgrades and refurbishments of their offerings.

RTG said its focus for the remainder of the year would be on driving growth in revenues through the consolidation of the domestic market, and continued aggressive sales and marketing in overseas markets.

“The company will also invest in high potential source markets such as the African continent, which is less sensitive to macro-environmental factors affecting destination Zimbabwe.

“The second half of the year usually contributes about 60% of business volumes and a similar trend is anticipated in 2019,” RTG said.

For the full year to the end of June, RTG generated foreign currency revenues of US$4.8m, up 9% from US$4.4m recorded during the same period in 2018.

“Increased foreign arrivals into resort hotels accounted for much of the growth at 5% above prior year. Overall, arrivals into RTG hotels grew by 14% in comparison to the national average growth of 1%,” the company said.

A third significant player in the Zimbabwean hoteling industry, Meikles, is disposing of its flagship Meikles Hotel in Harare.

Thabani Mpofu, company secretary for Meikles, said recently that the directors of the company had engaged regulatory authorities “in the process of finalising the Meikles Hotel transaction”. They are awaiting responses.

“The company will be seeking approval of its shareholders for the proposed disposal at an extraordinary general meeting to be convened at a future date,” said Mpofu.

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