Top eco-tourism outfit, Chobe Holdings Limited is at loggerheads with the lessor, Botswana Tourism Organisation (BTO) owing to lease clauses that are inconsistent with the invitation to tender documents, Jonathan Gibson, Group Chief Executive Officer (CEO) has revealed.
As the CEO and Deputy Chairman of the board, Gibson announced in the company’s half year results ending 31st August. The report noted that in December 2013, two of the company’s subsidiaries Desert & Delta and Ker Downey camp submitted tenders for the lease, utilisation and management of Camp Okavango and Shinde Camp for non-consumptive tourism purposes.
Further, he said that after considerable delayby the regulatory body, it has emerged that both leases have been awarded to the group for an initial period of fifteen years. However, the group disclosed in the financial report that formal leases have not yet been signed, owing to certain clauses that are not consistent with the invitation to tender documents. He did not however, reveal more details.
Notwithstanding the discrepancies, Gibson, told this publication that Chobe remains in full and unencumbered possession of those properties and has no doubt they will negotiate a way through the current impasse. “There is no danger in the substance of the leases being in disputed. The difference with our lessor surrounds conditions contained in those leases,” he said noting that he is not prepared at this stage to detail the issues to the media.
Both Chobe’s tourist brands, Desert & Delta Safaris and Ker Downey Safaris have properties in prime locations, which are well run establishments and fairly priced. Gibson says earning will not, as a result be impacted by the delay. “Tour operators who have the reach into those overseas markets have demonstrated considerable enthusiasm to book these properties over those of some of competitors.” For the six months ended 31 august 2016, Chobe’s occupancy increased by 5 percent when compared to the same period in prior year.
Though its not always easily or possible to tell why occupancies move up or down, Gibson says as most the group’s clientele are from the Northern Hemisphere, so much depends on several issues affecting the global market. Gibson eluded to the factors as those that “surround their lives such as the state of their own economies, their confidence in their own country going forward, their perception of Africa and Southern Africa but particularly Botswana as a safe destination, if non-American realise the value of their currencies relative to the USD is important as all rates are quoted in USD.”
“We also realize that we are providing an avenue for potential travellers to spend what is essentially disposable income,” he said emphasising that they must ensure they always remain competitive in the face of stiff competition from other holiday destinations worldwide.
For the period under review, a significant increase in revenue was recorded as a result of the aforementioned increase in bed/nights sold, favourable exchange rates, a marginal increase in achieved bed rates in US Dollar terms and contribution from the newly acquired wholly owned aircraft maintenance organisation.
The Group acquired an aircraft maintenance organisation through North West Air (Pty) Ltd on the1st March 2016. According to Gibson, in the first six months it has contributed about P500 000 after tax to the Group’s bottom line. A number of one off costs in terms of reorganization and re equipping were incurred but Gibson is confident that going forward results will improve.
The group anticipates that tourist numbers to Southern Africa in general and Botswana in particular will rise in the short to medium term. Botswana ticks the boxes as a safe destination, with friendly welcoming people and a well-managed wildlife resource with the result that the management says it is well positioned to benefit from this increase through its ever improving product offering coupled with the prime location of the Group’s camps and lodges.
However Gibson says the proposed tourism levy, if implemented may impact badly on earnings. “We believe that any bureaucratic and financial imposition between the travelling public and the accommodation provider is always regarded in a negative light,” giving the example of travel restrictions on minors into South Africa and the resulting down turn in tourism figures.