One of the oldest hospitality companies in the country, Cresta Marakanelo, says it has began to “feel the pinch” caused by the arrival of new market entrants in the hotels and lodges industry.
The capital Gaborone has been experiencing a mushrooming of new hotels and lodges in the recent months including international brands such as Hilton Hotel Group which is still under construction at the Central Business District (CBD).
Other new entrants include Woodlane Hotel as well as Room 50 two also located in CBD.
Last week, Cresta Marakanelo Group Chairman, Maria Nthebolan admitted that the local market was nearing saturation point as evidenced by increased competition and influx of new entrants, primarily in Gaborone and Francistown which has exerted pressure on the company’s market share.
As a result Nthebolan says customer retention remains a key focus for the Botswana Stock Exchange (BSE) listed hotelier.
“The Cresta loyalty card programme continues to contribute significantly to the growth of the customer database. Spend and redemptions by these loyalty members continue to grow. The company is exploring ways of increasing the benefits for the loyalty members by engaging in rewarding partnerships with service providers”, says Nthebolan.
A closer look at the group’s financial performance in Botswana shows that its operating profit which stood at P41.1 million reflected strong cost containment measures as well as the improved contribution to operating margins from most hotels, particularly Mowana in Kasane. The company had no new operating units added to the group during the year. However, Cresta Maun is expected to open to the market in the second quarter of 2017.
Outside the borders, Cresta’s trading operations in Zambia were affected by elections which were subsequently held in August 2016. The company reports that occupancies in its operations started improving in November 2016 with revenues growing by 6 percent compared to the same period last year.
Overall, the group achieved revenue of P334 million, which was a 4.4 percent growth from P320 million achieved in the previous year. At the same time, during the year under review, the group’s total Assets grew by 4 percent to P255.5 million (2015: P245 million). Equity grew by 10 percent to P179 million (2015: P163 million).