Sunbird Tourism plc, the Malawi Stock Exchange (MSE)-listed hospitality chain, says the post-election impasse slowed down business in 2019 and has forecast a challenging 2020 because of the impact of coronavirus and the fresh presidential election.
The group said its occupancy levels marginally declined to 52 percent compared to 57 percent achieved during the same period in 2018.
In the summary of audited financial statement, Sunbird Tourism plc—which owns Sunbird-branded hotels, resorts and lodges nationwide—has attributed occupancy levels to reduced travel by the corporate segment from both the domestic and international markets due to the political environment in the country.
“The hospitality industry witnessed reduced corporate travel in both domestic as well as foreign source markets. The post-election violence led to a number of booking cancellations,” reads a statement accompanying the results signed by Sunbird board chairperson Phillip Madinga.
Group revenues totalled K19.370 billion, which was slightly above 2018 revenues of K18.936 billion.
The financial statement shows that the corporate market segment, at 50 percent of total room nights, continues to be the anchor segment for the business followed by commercial market segment at 27 percent.
Sunbird has, however warned that the Covid-19 pandemic that has now spread all over the world has affected the travel patterns for both corporate and leisure and is resulting in significant reduction of travel in the country and depressing the tourism sector.
“This has resulted in some countries slowing down their activities and complete shut down for some countries like South Africa.
“These are countries that Malawi has a lot of economic activities with and may affect the supply of critical items to the country and specifically to the company,” reads the statement.
In view of the pending fresh presidential election as ordered by the High Court of Malawi sitting as the Constitutional Court that nullified the May 19 2019 presidential election, the hotel chain says this may also potentially depress economic activity and hence travel may also reduce and adversely impact the tourism sector in the first half of 2020.
But despite the challenges, the group’s profit after tax marginally increased from K2.562 billion in 2018 to K2.595 billion in 2019.
The board has proposed a final dividend of K131 million representing 50 tambala per share, bringing the total dividend to K262 million or K1 per share.
In 2018, the company also declared a total dividend of K262 million or K1 per share.