Chobe upbeat as tourists choose deferrals over cancellations
Pauline Dikuelo | Friday June 5, 2020 15:44
Chobe is one of the major players in a sector that has borne the brunt of the pandemic’s impact, with travel restrictions causing mass cancellations, revenue collapses and unemployment. Hospitality and tourism are amongst major contributors to the country’s foreign currency, employment and overall economy. Chobe CEO, John Gibson said the group had successfully pushed a marketing strategy around ‘don’t cancel, defer’.
“The marketing push of ‘don’t cancel, defer’ has been largely successful with more than 70% of the confirmed bookings that were scheduled to travel in the period of April to June 2020 deferring their travel to 2021,” he told investors in a commentary accompanying the recently released full-year results.
“Directors are therefore confident of a fairly quick recovery when it is deemed safe for international travel to resume.”
Gibson said Chobe’s strong cash and no debt position provides the group with the ability to ride out the pandemic’s impact and also take advantage of any expansion opportunities that may rise. Chobe, which has properties in some of the country’s most pristine tourism areas, posted pretax profits for the year ended February 29, 2020 of P133.3 million, up 20% year-on-year.
The group’s earnings per share rose to P1.09 from 91 thebe, but Chobe directors decided against declaring a dividend looking at the strained conditions in the tourism and travel market.
“Directors recognise the importance of prioritising the group’s cash resources towards preservation of assets, employee retention and marketing to secure the future earnings potential of the group. “Directors have therefore elected to defer the declaration of a dividend until such time as the group’s earnings potential is restored and cash flow allows,” Gibson added.
According to the World Tourism Organisation, the pandemic caused a 22% fall in international tourist arrivals during the first quarter of 2020 and the crisis could lead to an annual decline of between 60% and 80% for the full year when compared with 2019 figures. It is anticipated that signs of recovery will start emerging in the last quarter of 2020 going into 2021.