07 Apr 2019

Cresta Marakanelo Limited is embarking on an extensive undertaking to acquire five hotel properties valued at P260 million across the country.

That was shared at Cresta Marakanelo’s 2018 year end results briefing recently. 

The managing director Mr Mokwena Morulane also announced that the group was currently in the process of refurbishing and upgrading most of its existing properties using internally generated cash resources.

The Cresta group anticipates that the acquisition of the five properties would result in a reduction in operating costs as rental costs would no longer be incurred, he said. 

“There will be an increase in finance costs. However, this will be lower than the rental costs currently being incurred,” he said.

He said it was also envisaged that in so doing, Cresta would no longer incur the annual lease rental escalations for the five properties and therefore in the long term saving money.  

As a result of the decision to acquire property valued at P260 million and capital expenditure, the group announced that it would not be issuing dividends in 2019. 

“We took a prudent position of not declaring a dividend for the 2018 financial year as judicial management of cash during 2019 is critical since we seek to re-invest in refurbishments across most properties during the year,” he said. 

The group however reported a strong performance for 2018, selling six per cent more rooms compared to prior years, owing to additional rooms at Maun Resort and overall improvement in spite of increased competition.

Cresta Maun Hotel was a star performer despite being a relatively new comer to the industry, having opened in June 2017. 

“The hotel has appealed to both the leisure and the conference market with further increases in occupancies expected in the future as a result of additional marketing efforts, especially to tour operators,” Mr Morulane said. 

In light of digital developments driving the hospitality and tourism sector, the group is looking at upgrading its wifi offering and investing in bandwidth with the aim of improving its Information Communications Technology infrastructure. 

The group is also looking into having visible presence on social media and other digital platforms. ENDS