Tourism concern, Wilderness Holdings Limited says it intends to invest heavily in African tourism despite the risks inherent in the region.
In its financials for the six months ended August 31, 2017, the group indicated that tourism activity in Southern Africa is at high levels, noting that its forward occupancy for the rest of the year is encouraging. The group’s chief executive officer, Keith Vincent stated that it is their strategic intent to invest in African tourism, adding that they have tailored their business model to have the most impact in this environment.
However, he said this model is vulnerable to events that impact on travellers. “The political and economic uncertainty in Kenya and Zimbabwe and the volatile currencies are a concern,” Vincent said. Meanwhile, he said the impact of the exchange rate on the revenue line was negligible, adding, however, that on the bottom line it was far more significant as the stronger pula and rand pushed real selling rates down, impacting negatively on performance in South Africa and Botswana in particular. According to Vincent, the South African rand (ZAR) gained 11% against the United States dollar (USD), while the Botswana pula (BWP) appreciated by five percent. He said in the volatile election environment in Kenya the downturn in performance of the group was expected and with the continued electoral uncertainty there could be further impact.
“The group is satisfied with its acquisition of Governors’ and the mutual co-operation between the two businesses, and is confident that additional synergies between the groups can be unlocked,” Vincent said. Commenting on the financial performance, the group’s chief financial officer, Ami Azoulay said the group produced a sound performance demonstrating its resilience to the continued appreciation of the home currencies with 10% and two percent growth in revenue and earnings before interest, tax, depreciation and amortisation (EBITDA), respectively.
“Organic growth was pleasing, recording an eight percent increase in EBITDA, this despite having the group’s flagship camp earning less revenue while the rebuilding of the new camp is in progress,” he said. He added that total available bednights increased by 14% as the Governors’ businesses were included for the full period in comparison to just two months in the prior period. According to Azoulay, this inclusion of Governors’ resulted in a marginal decline of one percentage point, to 65%, in occupancy rate.
He said the air business in Namibia has made a promising recovery from a loss of P2 million to a profit of P1.5 million. “In late June, Bisate Lodge opened in Rwanda and is proving to be highly successful with occupancy rates reaching 90% in the high season,” Azoulay said. He added that the group recorded a 26% increase in headline earnings per share (HEPS). The comparative results for Governors’ include only high season, following its consolidation from July 1, 2016, while the current reporting also includes low season.
“This equates to a contribution of P64 million to revenue compared to P39 million in 2016 and P12 million to EBITDA compared to P18 million in 2016,” Azoulay said.