COVID-19 Massively Affects Cresta’s Balance Sheet

  • As the hotel’s revenue declines by P194.3 million
  • Recordeds a loss before taxation of P72 million
  • ‘Confidence in the tourism and hospitality sector is bolstered by the distribution of COVID-19 vaccines throughout the world’-Cresta Chairman


Revenue of Botswana’s leading hotel services provider, Cresta Marakanelo Limited declined by 194.3 million from P396.9 million in 2019 to P202.6 million in 2020, Cresta’s Non-Executive Chairman Moatlhodi Lekaukau has said.

According to Lekaukau the Group’s decline in revenue attributable to COVID-19 related cancellations or postponements, the national lockdown period, low occupancies, conferencing restrictions and ban of alcohol sales. Towards the end of March 2020, the Government of Botswana announced that the country would be on lockdown to limit the spread of COVID-19 an instance that led to Cresta temporarily closing its hotels for normal operations from 1 April 2020 to 4 June 2020 as according to Lekaukau in Cresta’s 2020 integrated report released recently.

“In Botswana, the local market was the only available business for eight months, between 1 April 2020 to 1 December 2020 due to the closure of borders to noncitizens and non-residents,” Lekaukau said.

“During this period, the Government of Botswana was supportive of the tourism and hospitality industry through its COVID-19 financial relief measures, granting a wage subsidy over nine months to qualifying businesses. The Group was a beneficiary of the wage subsidy and was eligible to receive a total of P14.6 million for the nine-month period.”

This is the Group that recorded a loss before taxation of P72 million in the year under review as compared to the 2019 profit before taxation of P30.6 million. Gross profit margin declined from 41 percent in 2019 to 26 percent which Lekaukau said was primarily due to the continuance of full salaries for the majority of staff, while operations were closed or curtailed.

“During the year, the cash generated from operations declined by 91 percent as a result of cash utilized in funding operating expenses during the period when the hotels were closed,” Lekaukau noted.

With that, Lekaukau stated that they expect continued disruptions to the travel and hospitality industry, particularly for the foreign tourist sector during 2021, with foreign tourism picking up in 2022. Whilst the COVID-19 pandemic ushered in unprecedented level of uncertainty on the tourism and hospitality industry, Lekaukau said the medium to long term outlook is bolstered by Vaccinations across the globe which are expected to increase people’s confidence to travel. Vaccinations in Botswana began in March 2021.

Meanwhile having his say in the report, Cresta’s Managing Director Mokwena Morulane highlighted that their hope is being revived as during the first quarter of 2021 occupancies increased steadily, albeit at levels significantly below the prior year. “Whilst the steady rise in occupancies is a positive sign, the occupancy levels achieved indicate that we are still in the pandemic turbulence,” he said.

“The situation is still uncertain and demands that the Group remain in survival mode. We still witness recurrent international lockdowns, in country movement restrictions, national borders closures, and various national legislations that affect our industry.”

Cresta Hotels is one of Southern Africa’s leading hotel management groups, operating business and resort hotels in Zimbabwe, Botswana and Zambia. Cresta Marakanelo is the operating company for the 10 Cresta Hotels in Botswana as well as one hotel in Zambia.