African Sun embarks on US$4.2m Hwange Safari Lodge...

African Sun embarks on US$4.2m Hwange Safari Lodge refurbishment

HWANGE SAFARI LODGE $109 ($̶1̶3̶6̶) - Updated 2023 Prices & Reviews - Hwange National Park, Zimbabwe

Zim Now Writer

African Sun Group is expecting to complete the US$4,2 million refurbishment of 100 rooms at Hwange Safari Lodge during the second quarter of 2023.

In a statement, African Sun Secretary and governance executive, Venon Musimbe, said the group noted that the season was characterised by macro-economic challenges ranging from inflationary pressures to foreign exchange rate volatility.

“The Zimbabwe dollar liquidity crunch persisted during the quarter under review, which combined with other factors which led to the economy being substantially United States of America dollar driven.

“The Reserve Bank of Zimbabwe in its first monetary policy statement of 2023 advised that approximately 75% of transactions in the local economy are now being conducted in US$.

“As a result, the Group witnessed its revenue and expenditure notably sewing toward the US$, with monthly averages of 60% and 40% of the Group’s revenue being earned in US$ and ZWL respectively.

“Based on the fact that the Group now primarily generates its revenues and incurs its costs substantially in US$, the Group changed its financial reporting functional currency from ZWL to US$ effective 1 January 2021,” reads the statement.

The group further said that foreign currency liquidation exemption which the tourism sector enjoyed since February 2022 expired during the quarter.

“The disparity between the parallel market exchange rate and the official exchange rate continues to exert pressure on operating margins as there is a notable mismatch between the exchange rate used by suppliers and the exchange rate used to liquidate foreign currency into ZWL and required for pricing of goods and services in ZWL.

“On a positive note, subsequent to the end of the quarter under review, the RBZ announced that all domestic foreign currency proceeds shall be exempt from liquidation for all sectors while export proceeds will continue to be subject to a 25% liquidation.

“Going forward, the Group will continue to monitor and respond to the unique challenges and opportunities presented by the current operating environment,” further reads the statement.

The company said revenue at US$7.9 million for the first quarter ended 31 March 2023 was down 2 percentage points compared to the same period last year.