The Botswana Stock Exchange listed Chobe holdings, which owns and operates twelve eco-tourism lodges and camps on leased land in Northern Botswana and the Caprivi Strip in Nambia is confident of a fairly quick recovery when it is deemed safe for international travel following the ban due to Covid-19 two months ago.
Trading under the brands Desert & Delta Safaris and Ker & Downey Botswana, the now only listed tourism operator following the delisting of competitor Wilderness Holdings lats year, the Group management says the company’s “strong cash and no debt position provides us with the ability to ride out the COVID-19 virus and the opportunity to take advantage of any expansion opportunities that may arise.”
From its latest financial results for the year ended February 29th 2020, the marketing push of “don’t cancel, defer” has been largely successful with more than 70 percent of the confirmed bookings that were scheduled to travel in the period April – June 2020 deferring their travel to 2021.
Although the occupancy remained fairly flat during this period when compared to the same period in the prior year due to increased competition and perhaps the effects of negative press around the lifting of the hunting suspension, a 10 percent increase in revenue was recorded during this reporting period. This was a result of better achieved bed night rates in US Dollar terms and depreciation of the Pula against the US Dollar. Other operating income comprises mainly foreign exchange gains.
The company’s CEO & Deputy Chairman Jonathan Gibson, said during the last couple of years the group spent considerable cash resources to upgrade its air- craft, motor vehicles, boats, other equipment, buildings and other operating assets. All the Group’s assets are secure and require minimal expense to keep them ready to perform. Policies and procedures are in place to ensure there is no adverse deterioration of assets during the lockdown.
The group’s projected CAPEX needs for the next 5 years are minimal except for Xugana Island Lodge which will soon require a total rebuild at an estimated cost of P30 million.
According to the World Tourism Organisation, the COVID-19 pandemic has caused a 22 percent fall in international tourist arrivals during the first quarter of 2020 and the crisis could lead to an annual decline of between 60 percent and 80 percent when compared with 2019 figures. It is anticipated that signs of recovery will start emerging in the last quarter of 2020 but mostly in 2021 with leisure tourism expected to recover quickly. The recovery is however dependent on containment of the virus, easing of travel restrictions and re- opening of borders.