African Sun banks on vaccination programme for business recovery

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  • Hotelier has been significantly affected by COVID-19 with overall occupancy falling by 25 percentage points
  • Zimbabwe is targeting herd immunity by year end
  • Stats however suggest that goal is not within reach

Harare – Hotelier, African Sun says it expects the vaccination programme currently underway in the country to propel its performance in 2021 as it will lead to the opening up of the economy which will trickle down into a recovery in tourism.

“As we look to the year ahead, we remain optimistic that the accelerating COVID-19 vaccination programmes will lead to further relaxing of restrictions and unlock leisure and business travel. There are prospects of a rebound in the later part of 2021 on the back of the current rollout of the COVID-19 vaccines and attaining of the required herd immunity,” the group chairman, Alex Makamure, said in its 2020 annual report.

However, Zimbabwe seems very far from achieving herd immunity. As at June 16,2021, the number of people in the country who had gotten at least one dose of a COVID-19 vaccine stood at 697 399 while those who had  been fully vaccinated were 423 474 against a target of 10 million by December.

The country has also in recent weeks experienced vaccine shortages which have seen some people being turned away from inoculation centres either for their first or second jabs.

Mr Makamure said meanwhile they have initiated cost saving programmes and are working on improving customer experiences in their hotel in a bid to stay afloat.

“While we do not expect that there will be a quick recovery to previous trading levels, we are optimistic that the various cost saving initiatives and the renewed focus on improving the customer experience, the Group will recover from the COVID-19 pandemic,” he explained.

As a result of the pandemic, the group recorded overall occupancy of 23% representing a decline of 25 percentage points compared to 48% recorded in 2019.

Consequently, there was a significant drop in the Group’s inflation adjusted revenue by 55% to ZW$1,84 billion compared to ZW$4,10 billion in the same period last year while room nights sold went down by 52% to 137,162 from 288,224 reported last year.

The group’s EBITDA in the period was only ZW$5,42 million compared to ZW$1,74 billion that was achieved in 2019 while they recorded an inflation adjusted loss before tax of ZW$1,86 billion.

The story is almost the same for all the other listed hoteliers, with some like the Rainbow Tourism Group adjusting and diversifying their business model to include the digital product Gateway Stream that allows them to also sell and profit from rooms that do not necessarily belong to them.

There is however a glimmer of hope, the government recently partnered the International Finance Corporation (IFC) on a project that is aimed at improving flight arrivals into Victoria Falls perhaps improve occupancies in hotels in the area.

The project which is supposed to run for two years is expected to improve flights to Victoria Falls and also by Harare by 5% from the pre-pandemic levels.

African Sun operates 11 hotels, including the Victoria Falls hotel, Monomotapa and Holiday Inn, it was 1 803 collective rooms, 21 restaurants and overall its conference centres having a carrying capacity of 7482 people.

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