Chobe Holdings suffer P35 million losses
Publically listed tourism operator, Chobe Holdings Limited has announced a massive, Covid-affected, 145 percent decline in profit after tax.
For the six-month period ended 31 August, the enterprise in fact registered a loss of P35 million.
This is compared to a P77 million profit recorded in the corresponding (March to August) period last year, and ultimately represents a swing of P112 million.
To add insult to injury, Chobe Holdings, whose model is based predominantly on high-end tourism, says before the outbreak of the pandemic it anticipated its best year ever in terms of already confirmed bookings.
However, that was brought crashing down during the first half of the year when Covid-19 induced lockdowns meant international visitors could no longer visit Botswana.
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“Revenues collapsed overnight, but many expenses remained in the form of payrolls, the cost of disposing of perishable food and beverage items, lease fees to the local and central government,” notes Jonathan Gibson, Chief Executive Officer and Deputy Chairperson of Chobe.
He further revealed the company incurred additional costs to secure and maintain properties and equipment in the hope of a resumption of business in the not-too-distant future.
As revenue drastically declined, Gibson says in order to preserve cash resources, salaries and wages were cut by as much as 75 percent.
“The tourism accommodation entities of the group have been fortunate to be able to take advantage of the wage subsidy offered by the government which has greatly contributed to shoring up the group’s financial reserves,” he added.
This week, the government announced it has approved an extension of the wage subsidy for the tourism sector for the months July through to December.
The Botswana Unified Revenue Service (BURS) is said to be processing payment for all licenced tourism operators who have fulfilled the requirements.
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Initially, to protect and preserve bookings already made, and most often pre-paid for, either in whole or part, Gibson explained that the company’s marketing and reservations teams embarked on a ‘don’t cancel, defer’ strategy.
This was reportedly well-received by most, in anticipation that the closure of borders would be relatively short.
“As, however, the timeline of the crisis lengthens there is pressure to refund some prospective travellers, a fraught situation as many tour operators through whom they originally booked are no longer in operation thanks to the Covid-19 crisis,” admitted Gibson.
For cases where the tour operator is still operational, Chobe Holdings has no way to ensure the original pre-payment will find its way back into the hands of the traveller.
Meanwhile, Gibson says the company may reconsider its citizen and regional rates in order to attract domestic tourism.
He glumly noted that the recent extension of the State of Public Emergency could prove a further blow to the tourism industry as perception abroad is such declarations are prompted by civil unrest and other calamities.