Sunbird Malawi to open new Hotel

 Sunbird Malawi to open new Hotel

Sunbird Malawi to open new hotel.

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Notwithstanding the impact of Covid 19 on tourism ,leading Malawi stock exchange listed Sunbird Hotels and Resorts is embarking on massive expansion and is set to open a new hotel this year.

Apart from that according to the  expansion roadmap which  is contained in the company’s 2020 financial year results the company is geared towards improving guest experience by continuing with hotel  refurbishments  to provide unparalleled experience to tourists.

While admitting on the impact of covid 19 pandemic on the tourism and economy at large , Sunbird is optimistic   it will  continue to offer unrivalled guest experience through delivery of high quality products and services in order to retain and grow its client base both in the domestic as well as the international market sectors.

‚ÄúCompany will continue its efforts to improve service delivery, enhance guest experience, undertake product improvements (refurbishments) and also intensify sales and marketing activities,‚ÄĚ Sunbird Hotels and Resorts said in a statement accompanying the 2020 financial statements.

‚ÄúThere are a number of key product improvement plans that are currently underway. These include: the completion of the 42 bedroom Sunbird Waterfront Hotel at Sunbird Livingstonia Beach, refurbishment of Sunbird Ku Chawe and Sunbird Mzuzu, introduction of new Vincent Platinum Restaurant at Sunbird Mount Soche. These are expected to be completed in 2021.‚ÄĚ

The new Sunbird Waterfront Hotel located in the lakeshow side of Salima district will be comprised of 10 suites,4 family rooms,26 deluxe rooms fitted with modern facilities matching international standards.

While the  impact of Covid -19 pandemic led to suspension of some of the planned projects in the past  year,  the company however  completed the construction of additional 15 rooms at Sunbird Nkopola and New Kitchen at Sunbird Ku Chawe. This is expected to enhance the revenue base for the company going forward.

The Board said it  expects the country’s economy to continue to face considerable risks including the impact of the COVID-19 pandemic and the consequences of high government debt on the economy.

However, the arrival of COVID-19 vaccines and good agricultural season project a more favourable outlook than 2020.

‚ÄúThe COVID-19 pandemic has affected the travel patterns for both corporate and leisure and is resulting in significant reduction of travel, thereby depressing the hospitality sector. There are some signs of confidence in the market due to reduced number of new cases and the roll out of the vaccines worldwide. The Board is optimistic that if the trend is sustained, the business should return to profitability,‚ÄĚ Sunbird said.

On financial performance total revenue for the year ended December 31, 2020 was pegged at MK13.5 billion (US$17 million)n   ,30% lower than 2019 revenue of MK19.4 billion(US$24,5 million).

The Company registered 32% occupancy levels during the year compared to 52% achieved prior year.

Administration and other expenses decreased by 5%, from MK11.5 billion in 2019 to MK10.9 billion in 2020  as a result of Management’s efforts in aligning expenditure to business volumes.

Total finance costs amounted to MK826.0 million compared to MK228.7 million in 2019. The increase was as a result of capitalization of debt financed construction projects which included the new Soche International Conference Centre at Mount Soche, the refurbishment of rooms at both Sunbird Nkopola and Sunbird Livingstonia which were completed in 2019 and the construction of 15 additional rooms at Sunbird Nkopola completed in mid-2020.

‚ÄúThe hospitality industry suffered unprecedented business disruption due to the impact of the COVID-19 pandemic which resulted in reduction in travel from both local and international tourists. The restrictions on number of participants attending meetings also affected the conference and banqueting business,‚ÄĚ the company said.

The Corporate Market segment which constituted 51% of total room nights sold continues to be the anchor segment for the business, followed by Commercial Market segment at 22%.

The hospitality company  said there is continued focus on sustaining these key segments while initiatives to grow the other segments, such as leisure, continue to be prioritized in order to optimize the potential of the different properties of the Company, especially the resorts.

A number of segment based strategies are in place aimed at diversifying sources of revenues which  include diversification into management contracts and joint ventures among others. The company also  signed a concession agreement on Chintheche Inn in 2020 as part of this growth strategy.

The Company incurred a loss of MK1.2 billion (2019: profit K2.6 billion). The Loss emanated from substantially reduced revenues occasioned by the effects of Covid-19 to which the sector is one of the severely impacted. The performance was also affected by the political related disruptions arising from presidential re-elections in 2020.

Due to the loss that the Company has reported for the year, the Board resolved no dividend shall be paid in respect of the year ended 31 December 2020. In 2019, the Company declared a total dividend of MK261.6 million or K1 per share.

Fidelity Hamilton Mhlanga

Fidelity Hamilton Mhlanga has been writing finance and business news over the past 5 years. He earned a BSC in Media and Society Studies and Masters of Development Studies from Midlands State University, in Zimbabwe. He follows mining, insurance, banking and energy stories. He is passionate about development and growth.

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