Covid-19 takes toll on occupancies 

Source: Covid-19 takes toll on occupancies | The Herald

Covid-19 takes toll on occupancies“The growth trajectory and volumes rebuilding phase is likely to be flatter due to lockdowns, and low disposable incomes,” said African Sun a five months trading update to May. 

Business Writer 

Hotel group, Africa Sun, says it will be harder to attract visitors due to Covid-19-induced lockdowns as the country faces the possibility of a third wave of the pandemic. 

On Tuesday, Zimbabwe imposed tougher national lockdown rules, including an overnight curfew, the ban on inter-city travel and fewer business hours in response to rising infections.  

Prior to new measures, the Government had already imposed localised lockdowns in selected hotspots to limit the spread of the virus. 

For the next two weeks, businesses will open between 8 am and 3 pm while a curfew will start from 6:30 pm to 6 am.

Companies are required to only have 40 percent of their workforce. The new measures will be reviewed after two weeks.  

“The growth trajectory and volumes rebuilding phase is likely to be flatter due to lockdowns, and low disposable incomes,” said African Sun a five months trading update to May. 

It said power, fuel and foreign currency shortages would also impact on service delivery going forward, but mitigation mechanisms against the business have been put in place. 

The group anticipates continued disruption to travel and tourism in the months ahead due to the Covid-19 pandemic with the future remaining “very uncertain.” 

It said F21 performance would be anchored on domestic business with Government, NGOs and corporate business expected to be the main drivers. 

According to the United Nations World Travel Organisation, international business is set to gradually resume starting from Q4 of 2021 as airlines start rebuilding networks. 

In five months to May, occupancy was 22 percent, down by 21 percentage points compared to 43 percent recorded for the same in 2019. 

The trading update was compared to five months to May 31, 2019 as the company hardly traded in the first five months of last year. 

This was largely due to Covid-19 induced lockdowns, as hotels recorded minimal occupancies of 7 percent and 10 percent in January and February respectively. 

Revenue for the five months closed at $739 million (inflation adjusted), 6 percent ahead of the revised budget and 41 percent below same period in 2019. 

The revenue was split 95 percent and 5 percent between domestic and foreign respectively. 

According to UNWTO Tourism Barometer, international tourist arrivals for the first quarter of 2021 declined by 83 percent compared to 2020. 

The outlook remains “cautious” due to hindrance in the resumption of international travel driven by new virus outbreaks accelerating the third and fourth waves, said African Sun. 

Average daily rate was US$91 or 7 percent down on US$99 reported same period in 2019 mainly due to lack of foreign business which comes at a premium rates.  

Depressed economic environment, characterised by a slowdown in economic activity, hyper-inflation, shortages of foreign currency and fuel also contributed to reduced volumes for the domestic market by 29 percent year to date compared to 2019. 

Overheads to turnover ratio was 100 percent compared to 51 percent recorded in the same period in 2019 due to impact of suppressed revenues against fixed costs. 

EBITDA margin was 3 percent compared to 38 percent recorded same period in 2019.