African Sun has sold two of its underperforming hotels, raising almost US$7 million that will be used to refurbish its remaining operations.
The company is selling the Great Zimbabwe Hotel, one of its least profitable operations, for US$4.45 million. Beitbridge Express Hotel, which has been shut down since 2016, has been sold for US$2.5 million. The buyer is TD Hotels, a company tied to former central bank governor Gideon Gono.
“Due to deteriorating trading conditions, the Beitbridge Express Hotel was mothballed in early 2016 while the Great Zimbabwe Hotel has been a marginal contributor to the profitability of the Group over the review period,” African Sun says in a statement.
In a further statement, the company announced that it was selling more of its assets. Hotel industry players say African Sun plans to sell the Monomotapa Hotel, which has attracted interest from two hotel brands, Legacy and Protea. Also on sale is Caribbea Bay in Kariba.
African Sun co-runs the Vic Falls Hotel with Meikles, which has announced a plan to sell a key asset. It is believed that Meikles is discussing the sale of its 50% share of Vic Falls Hotel to Albwardy, which bought the Meikles Hotel in 2019.
African Sun’s hotel occupancy rate rose to 52% last year, six percentage points above 2022 and beating the levels of 46% before the pandemic. Earlier this year, African Sun reported that it closed 2023 with US$10.87 million cash in its books, and that it was talking to banks to secure additional funding to refurbish its hotels. The company says the sale of the two hotels will help it upgrade the remaining assets.
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“In order to expedite the refurbishment of several of the portfolio’s primary hotels, the Board deemed it necessary to complement capital raising initiatives by selling selected assets deemed not to be core to ASUN’s future, including the Beitbridge Express and The Great Zimbabwe hotels,” the company says.
African Sun currently operates ten hotels. It owns seven hotels – Holiday Inn Mutare, Monomotapa, Troutbeck Resort, Elephant Hills, Hwange Safari Lodge, Great Zimbabwe Hotel and Caribbea Bay. It leases three properties; Holiday Inn Harare, Holiday Inn Bulawayo and The Victoria Falls Hotel. The company left the Kingdom Hotel in Victoria Falls in 2023 after a lease dispute with the property owner.
