Rent reviews, high occupancy level drive African Sun’s revenue

Victoria Falls Stock Exchange (VFEX) listed hotel group, Africa Sun, says revenue for the third quarter to September 30, 2024, at US$18.1 million is 24 percent ahead of the same period last year, largely anchored by the domestic market.

The company, in a trading update, also said year-to date revenue at US$43.7 million grew by 18 percent, largely driven by higher occupancy rates, a firmer average daily rate (“ADR”), increased sales in food and beverages and a growing revenue contribution from the real estate segment.

“On a year-to-date basis, the domestic market remains the business anchor, contributing 71 percent of room nights sold, while the share from international arrivals has risen to 29 percent from 26 percent,” the company noted.

The group said occupancy levels for the quarter improved by 7 percentage points compared to the previous year, primarily driven by higher demand for Meetings, Incentives, Conferences and Events (“MICE”) in resort and city hotels.

“ADR firmed, bolstered by enhanced product offerings in refurbished hotels and strong demand.”

African Sun said food, beverage, and ancillary revenues reported a 28 percent rise due to increased uptake from the conferences.

Additionally, the real estate segment’s revenue contribution grew to 5 percent from 2 percent, attributed to the sale of Marlborough Sunset Views stands.

The company said it maintained a strong liquidity position, with a cash and cash equivalents balance of US$11.5 million at 30 September 2024.

African Sun said it moves into the year’s final quarter and expects a robust performance driven by the domestic market, conference business and the festive season spending.

“While the macroeconomic environment may remain turbulent, management is confident that the group will continue to be agile and well-prepared to navigate through the economic challenges, ensuring the creation of sustainable value,” reads the trading update.

The company has since announced plans to sell its flagship property, the Monomotapa Hotel Crowne Plaza in Harare.

The move comes as part of a strategic initiative to streamline its hotel portfolio and reinvest proceeds into other operations, including a comprehensive refurbishment programme across its properties.-ebsinessweekl