Cresta Marakanelo, the Botswana Stock Exchange quoted hotel group, said it will continue to target expansion into the region and the domestic market following the acquisition of an operation in Zambia and the opening of a new hotel in Mahalapye, the home base for Botswana Railways.
In a statement accompanying the group results, the company, headed by Tawanda Makaya, said it will spend P5.5 million this year to refurbish Cresta Marang Garden in Francistown where it has a sizeable market share.
“The group continues to explore new markets in an endeavor to increase revenues. The group further continues to explore opportunities in and outside the country for new hotel business with the aim of increasing the number of rooms. This will be pursued through the growth strategy that is in place,” the company said.
According to Cresta’s full year results for the period ended 31, December 2012, the acquisition of the 78-roomed Golfview Hotel Ltd in Zambia for P20 million last year boosted the group revenues.
The Zambian operation generated P23.8 million of the total P243 million headline earnings made by the group, but the figure was consumed by rising costs. The Cresta revenues were a 16 percent drop from the P290.5 million registered in the prior year. The revenues were achieved on the group’s average room rates of P 763 and average occupancies of 61 percent. The group’s profit before taxation stood at P24.4 million and after tax profit was P20.5 million, a 2.1 percent reduction from the corresponding period.
Cresta Marakanelo Chief Financial Officer, Valentine Mganga, said despite the challenges, the group managed to increase the shareholders funds by 13 percent and will be paying a dividend that will be 10 percent higher than the previous one to the dear shareholders of the group.
“The year 2012 was an interesting year and also a challenging one for the company. It was interesting in the sense that despite the challenges, the company managed to record impressive results. Everyone in the company was focused in achieving better results compared to the previous periods,” said Mganga.
Cresta’s market share differs from one place to another where it operates. For example, Mganga said that in Gaborone, the market share is 46 percent and Chobe at 56 percent.
Founded in 1974, Cresta, initially BDC Hotel Management, has big names like Cresta Lodge, President Hotel, Botsalo Hotel, Bosele Hotel, Marang Gardens and Hotel, President Hotel, Riley’s Hotel, and Cresta Mowana Safari Lodge under its arm.
Cresta faces challenges in the market, including the entry competitors with a number of room stock increased in the markets where the company operates. The company was forced to compete with peers with the entry of more than 100 rooms which came into the market since 2011.
Cresta is bullish that the addition of the 65-roomed Cresta Mahalapye will help improve the company’s fortunes and service the tourism industry along the railway line and new Botswana International University of Science and Technology (BIUST) in nearby Palapye. Among the achievements for the year 2012 are opening a hotel in Zambia and the Cresta Mahalapye hotel. Even though it opened doors in February 2013, completion of major refurbishments at Cresta Mowana Safari Resort and Spa and also opening a state of the art beauty spa at Cresta Mowana Resort and Spa.