Arden Capital braces for tough 2020 as Covid-19 hits tourism
Group expected recovery, but pandemic has put additional pressure on Zimbabwe
Zimbabwe-focused private equity group Arden Capital, formerly Brainworks, is bracing for the fallout from Covid-19, which has shuttered its 11 hotels and has undermined previous optimism about 2020.
The group is cutting staff and engaging with landlords, anticipating low volumes in demand in coming months, as Covid-19 threatens demand in the second half of 2020, its peak demand season.
The group reported that demand in its hotels business deteriorated in its year to end-December, with 2018 benefiting from relative stability in Zimbabwe’s economy and demand related to the election in the country.
Occupancy declined 11 percentage points to 48% in 2019, but 2020 was expected to be better, with 2019 also seeing the effects of protests in Zimbabwe in January sparked by a rise in fuel prices.
“While recovery was anticipated in 2020 those positive prospects and optimism have been adversely impacted by the global outbreak of Covid-19,” the group said.
Revenue decreased 27% to $58.1m (R1bn) although group operating expenses fell 34%, partially due to cost-containment efforts. Group profit rose by almost a third to $13.8m.