SUMMARY – AFRICAN SUN LIMITED ALLOCATES $12 MILLION FOR HOTEL REFURBISHMENTS, STRIVING FOR WORLD-CLASS STANDARDS. STRONG REVENUE GROWTH DRIVES ONGOING UPGRADES TO ENHANCE GUEST EXPERIENCE AND PRESERVE VALUE.
African Sun Limited (ASL), a prominent hospitality group, has earmarked $12 million for the renovation of its hotels nationwide over the next two years. This ambitious project aims to elevate the facilities to world-class standards, with a portion of the funds obtained through borrowing. ASL, which operates ten hotels across the country, made history this year as the first hospitality group to be listed on the Victoria Falls Stock Exchange (VFEX). The listing on VFEX is part of the company’s efforts to expand its capital base for financing equity and capital projects.
According to ASL’s 2022 annual report, the group has been diligently upgrading its hotel facilities, with some renovations already finalized. Notably, during the third quarter of 2022, 47 rooms and the kitchen at the prestigious five-star Victoria Falls Hotel underwent refurbishment, with an investment of around $5 million from ASL and its partner, Meikles Limited. Furthermore, in the last quarter of 2022, the group successfully renovated all 70 rooms at Troutbeck Resort.
The refurbishment of rooms at Hwange Safari Lodge commenced in August 2022, and as of the report’s publication, 56 rooms had already completed, with the remaining 44 rooms expected to be finished by mid-year. Additionally, significant progress has made in refurbishing the remaining rooms at Great Zimbabwe Hotel, including the conference center, and it is anticipated that the work will be completed by mid-year. ASL actively engages in preparatory work to upgrade all its hotels to meet world-class standards.
Future Investment and Cash Deployment Strategy
Dr. Emmanuel Fundira, Chairman of ASL, expressed pride in the ongoing and completed hotel refurbishments, while acknowledging the need to upgrade the remaining hotels. He emphasized that the group wants to prepare all its hotels for world-class standards. The estimated expenditure for these endeavors is approximately $12 million within the next year or two, subject to business and economic performance. The funding will source from both internal cash reserves and borrowing. Dr. Fundira reiterated that the cash deployment strategy will remain unchanged, focusing on targeted capital expenditure to enhance the guest experience and preserve value.
Impressive Revenue Growth and Performance
ASL witnessed a remarkable growth in revenue for the year under review, amounting to $31.8 billion, marking a 114 percent increase compared to the previous year. Group revenue for the year ending December 31, 2022, reached $53.2 million, showcasing a 62 percent growth from the prior year. This outstanding performance can attribute to a 15 percent rise in occupancy and stronger average daily rates. Although the occupancy rate of 46 percent fell short of the pre-pandemic level of 48 percent achieved in 2019, it still displayed a commendable recovery.
Dr. Fundira revealed that 60 percent of the group’s revenue generated in foreign currency. Among hotel revenue, domestic arrivals contributed 81 percent, while foreign visitors contributed 19 percent. The improved performance of ASL is a testament to the recovery of both domestic and international business. City and country hotels achieved an occupancy rate of 58 percent (compared to 45 percent in 2021), while resort hotels, which continue to grapple with the impact of the pandemic, reached a 36 percent occupancy level (compared to 19 percent in 2021). Dr. Fundira highlighted that the hospitality segment accounted for 98 percent of group revenue, with the remaining two percent attributed to the real estate segment.