Experts forecast bright future for Chobe Holdings

Tourism industry is strong on the recovery path
Tourism industry is strong on the recovery path

Tourism group, Chobe Holdings Limited is set to greatly benefit from the robust outlook for the tourism sector, if a recent research by Stockbrokers Botswana is anything to go by.

The brokerage firm said projections point to an improved outlook in key markets for Chobe, which owns and operates eco-tourism luxury lodges and camps in Botswana and Namibia.

Stockbrokers research analyst, Thatayaone Motsomi said the global economic recovery will likely see increased flows of visitors looking to explore the region’s attractions.

“Chobe’s clientele largely consists of visitors from the United States (US) and Europe, with only a small portion coming from within the SADC [Southern African Development Community] region,” he said. According to Motsomi, growth in the US for 2017 is projected at 2.1% and growth in the Euro area at 1.9% as per the International Monetary Fund (IMF) statistics.

He also cited the World Travel and Tourism Council statistics, which indicate that the direct contribution of travel and tourism to the gross domestic product (GDP) in 2016 was P6.28 billion (3.9% of GDP) and is forecast to rise by 8.5% to P6.8 billion in 2017.

In addition, Motsomi said visitor exports that account for the bulk of the contribution, amounted to P6.22 billion in 2016 and is forecast to grow by 11.6% in 2017 with estimates of 1.8 million international tourist arrivals.

“These are encouraging numbers for the tourism industry and should benefit Chobe in their current financial year,” he said. He further pointed out that the government, through the Ministry of Environment, Natural Resource Conservation and Tourism, continues to support the tourism industry by marketing and promoting Botswana internationally as a tourist destination, increasing the visibility of the local tourist attractions.

“Tourism in Botswana is a growth sector with gradually increasing importance to the economy,” he said.

With increased terrorist activity in the northern hemisphere, Motsomi said safe destinations like Botswana should appear relatively attractive to the international tourist. However, he said, policy risks remain prevalent with the uncertainty stemming from the new Donald Trump administration in the US and ongoing Brexit divorce talks.

He also said exchange rate fluctuations present a degree of uncertainty to performance, noting that weakness of the dollar would hamper the group’s profitability. In addition, he said, the opening of the Victoria Falls International Airport is a positive development for the SADC region as a whole.

“The facility is envisaged to serve as a tourism hub for SADC and should lead to increased influx of tourists into the region,” Motsomi said.

Meanwhile, Chobe delivered a solid performance for the full year of 2017 with revenue shooting up 28.1% to P269.9 million from P210.8 million in 2016, underpinned by improved occupancy at 52% with bed nights sold increasing to 50,908 from 46,108 in 2016 coupled with increases in bed night rates (which are quoted in dollars) and a weaker pula against the dollar for the period under review.

Recently, the group has recently acquired the entire stated capital of Dinaka Safaris through Ker & Downey Botswana, for a cash consideration of P56 million post year-end.

The camp, whose operations will be consolidated into the group from September 1, 2017, has a capacity of 16 beds and is located north of the Central Kalahari Game Reserve on a 20,000 private game ranch. However, the contribution from the acquisition is expected to be insignificant in the current financial year.

Editor's Comment
Seamless Business Environment Needed Post-COVID

The country was also classified as the least corrupt in the world with strong anti-graft checks and balances. With these assurances, investors were guaranteed safety on their investments and returns. That is no longer the case. Several countries like Namibia, South Africa and Mauritius have done well over the years and overtaken Botswana as attractive places to do business.Therefore, when countries that Botswana is competing with for a piece of...

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