Tourism and hospitality giant, African Sun Limited, weathered the effects of COVID-19 in March to close the first quarter of 2020 at 40 percent occupancy, a 2 percentage points increase from 38 percent recorded in the same quarter last year.
The Zimbabwe Stock Exchange-listed group is involved in the running of hotels, resorts, casinos and timeshare operations.
In a trading update for the first quarter ended March 31, 2020, company secretary, Venon Musimbe said despite the effects of COVID-19 they managed to perform better than last year in terms of volume performance during the same period.
“The recovery from Q1 (first quarter) of 2019 was largely due to a stable operating environment in contrast to the comparable quarter last year which had civil unrest and national shutdown protests,” said Musimbe.
“Room nights sold increased by 4 percent from 52,617 reported in the comparable quarter last year to 54,972 this year. Business mix for the first quarter with regards to room nights was 67 percent local and 33 percent export.”
Musimbe said export room nights reduced by 2 percent due to the early effects of COVID-19 which affected arrivals, particularly in the group’s Victoria Falls properties.
“Domestic room nights increased by 8 percent, a growth that was driven by corporate and non-governmental organisations (NGO) business,” said Musimbe.
He, however, said the economic environment remained turbulent during the period under review, characterised by hyperinflation, fuel and power shortages.
“Hyperinflation coupled with exchange rate instabilities posed significant challenges in pricing and created distortions in financial reporting,” bemoaned Musimbe.
“The latter part of the first quarter was impacted by the emergence of the coronavirus (“COVID-19”) pandemic. In response to COVID-19, many countries grounded their airlines, implemented travel restrictions and lockdown measures in a bid to contain the pandemic and flatten the curve. These measures have continued to weigh on the group’s international business outlook resulting in cancellation of bookings or deferrals without concrete alternative dates.”
He added that the combined effect of the turbulent macroeconomic environment and COVID-19-induced developments on their business was reflected in the reduction in volumes from export markets and subdued local market growth.