African Sun registers increased occupancy levels

The Herald

Business Writer

Hotelier African Sun says despite the marked decline in occupancies and business during the second quarter of the year as a result of the coronavirus pandemic, the company saw signs of recovery during the third quarter ended September 30, 2020.

International tourist arrivals are however expected to remain dire as key source markets are now experiencing a significant resurgence in Covid-19 cases.

In a trading update released Monday, African Sun said the third quarter (“Q3”) results reflect an encouraging improvement from the second quarter (“Q2”) amid the intractable impacts of Covid-19.

The Group more than doubled the number of room nights sold from 8,144 in Q2 to 20,329 in Q3, with domestic demand being driven by Government and Non-Governmental Organizations.

“While Group performance for the quarter under review continued to suffer from COVID-19, key Group performance indicators in Q3 show a steady recovery from Q2,” reads part of the trading update.

Occupancy improved from 5 percent in Q2 to 14 percent in Q3, largely driven by the relaxation of lockdown restrictions, together with a number of promotional initiatives by the Group to improve demand.

However, compared to the comparative prior year, occupancy for the third quarter decreased by 37 percentage points.

Turning to year to date performance, occupancy was down 28 percentage points, compared to the prior year.

Like the rest of the tourism sector, African Sun is not expecting an uptick in international tourist arrivals in the short to medium term.

“Looking ahead, we expect international business to remain subdued over the coming months due to the resurgence in Covid-19 cases in our key source markets,” reads part of the trading update.

The resurgence will naturally be expected to negatively impact international business at least in the short to medium term.

In addition to resurgence in cases, international travellers from countries that have opened up their border such as South Africa are still discouraged by the requirements to self-isolate or quarantine for extended periods upon arriving at the holiday venues, African Sun reckons.

“In the short term this will continue to hamper efforts to boost international tourism.”

Despite the current slump, Government still sees the sector as a focus area for economic growth and development.

In the recently launched National Development Strategy 1, which is set to run between 2021 and 2025, the tourism sector is described as a low investment and high output sector.

“During the NDS1 planning period, the tourism sector is expected to immediately turning around its fortunes riding on its resilience and its low hanging status as a low investment and high output sector.

“Further, the improved operating environment owing to continued economic stability and enabling infrastructure developments such as the ongoing upgrading of the Beitbridge- Harare-Chirundu and the Karoi-Binga Highways among others, will widen opportunities for further tourism growth,” reads part of NDS1.

The implementation of NDS1 will focus on achieving the national outcome of increasing the contribution of tourism to GDP from 1.1 percent in 2020 to 5 percent by 2025.

Under NDS1, the growth of the Tourism Sector will be anchored on increased investment in  diversified tourism products such as heritage tourism, medical tourism and community based tourism, among others.

Key flagships will be the opening up of new Tourism resorts in Kanyemba, Tugwi Mukorsi, Kariba and the development of new nodes anchored on the Victoria Falls Special Economic Zone, notably in Masuwe, Batoka, Gwayi Shangani Dam, Binga and Sijarira.

The Herald