The revival of Livingstone, Zambia as a tourist destination has woken up the tourism sector from a deep slumber that have seen Chobe Holdings’ revenue shooting 28 percent during its first half of the year.
The Groups revenue went up 28 percent or P 34.6 million and its earning per share stood at 45 percent to 13.9 thebe.
In his research note titled “ Livingstone, I presume ?” released this week, Richard Mhango, an analyst at African Alliance he attributed the resurgence of the company to the revival of Livingstone as a tourist destination.
“The group continues its successful turn around in a buoyant environment that favour all key drivers. The revival of Livingstone as a tourist destination should provide a healthy spillover into the Okovango/ Chobe area,” he said in his research note.
He added: “ Chobe is well positioned in terms of capacity and geographical spread within the potential spillover region in the Okavango/ Chobe area.”
The current tourism boom at Livingstone is supported by Victoria Falls which falls between Zambia and Zimbabwe.
Two years ago, following the eruption of Zimbabwe economic and political crisis at the beginning of the century Zambia has been burning a lot of money in trying to prop-up its tourism sector that was negatively affected by negative perception of the region at the global tourists.
Livingstone which is some 80 kilometers from the resort town of Kasane has an international airport and some world class hotels and currently boasts with some rich international tourists from western Europe and Japan.
The revival of Lingstone as a tourists destination may also affect the air transportation from some of the regional tourists destination such as Johannesburg and Cape Town as tourists opt to fly into the Zambia town and then connecting to Kasane through small plane.
That may come about if Air Botswana does not sort-out its constant flight problems.
Further, Mhango noted that the spillover will benefit Chobe region largely because of the geographical proximity and the pula exchange rate against the greenback.
“ The upward trend in revenue was given further impetus by 10 percent depreciation in the Pula on average of P 5.76 against the US dollar in the half year under review. With the crawling peg exchange rate mechanism intended to guard against significant overvaluation of the pula, our analysis projects a bright horizon for Chobe as supported by the current inflation differential given the counters disproportionately higher sensitivity to the currency exchange,” the research note said.
“We remain convinced that of a positive short to medium term outlook. On the basis of the aforementioned, we have adjusted our earnings forecasts upwards, and project a Full year 2007 earning per share of 26.33 thebe. On a dividend cover of two times for Full year forecast a dividend per share rise of 73.2 percent to 13.2 thebe,” he said.
The group has operations in Botswana and neighbouring countries with a total of 254 beds at an occupancy rate of 48 percent.