African Sun Limited set to invest $60 million on hotel ahead of 2010

African Sun Limited plans to spend US$60 million on hotel capacity expansion in light of the expected huge demand for accommodation when South Africa hosts the 2010 Fifa Soccer World Cup.

The capacity expansion initiative would raise the hospitality group’s capacity to 8 500 rooms by 2012 from the current 3 000 rooms. African Sun also recently indicated it would spend US$15 million on face-lifting its local hotels ahead of the soccer showpiece.

African Sun chief executive Mr Shingi Munyeza said 75 percent of the expansion would be in the region and the remainder in Zimbabwe. “We hope to spend US$60 million up to 2012 on increasing the number of our hotel rooms.
“Three quarters of that would be in the region and 25 percent in Zimbabwe,” said Mr Munyeza.

This resolution came on the back of reports that there would be a massive shortage of accommodation in South Africa, which presented hospitality companies with a huge business opportunity.

Zimbabwe has 6 700 hotel rooms, the second largest capacity in the region after South Africa. This meant South Africa would be overwhelmed by the demand for accommodation and regional countries would have to chip in.

More than 450 000 visitors would descend in South Africa for the soccer World Cup and 50 000 rooms would be required. South Africa is believed to have just over 32 000 hotel rooms and would experience a deficit for accommodation of 18 000 hotel rooms.

Mr Munyeza, who is the chairman of the Zimbabwe Tourism Authority, said they would re-engage Match, Fifa’s accommodation company, for the country to be listed among countries capable of providing accommodation to visiting World Cup soccer fans.

Negotiations with Match had collapsed after Zimbabwe disagreed with Match’s cancellation policy on clients that would have failed to fulfill reservations made for hotel accommodation. Mr Munyeza said Match insisted that people who would have failed to pitch up for reservations made with accommodation providers would not have to be penalised, which Zimbabwe disagreed with.

Guest houses, lodges and other decent accommodation would be allowed to render the service after it was realised that hotels only would not be able to meet demand for accommodation next year.

SADC countries expect to cash in on the 2010 Fifa World Cup considering visiting teams would need time to acclimatise in countries with similar weather patterns as the host country South Africa. This was particularly the case, as visiting football teams would not be allowed to enter South Africa 10 days before the tournament began.

Football fans would also follow their teams to watch them in training and this meant more demand for accommodation in South Africa’s neighbouring countries.

Against this background Zimbabwe, Zambia and Botswana should not be ignored as countries that would be expected to absorb South Africa’s spill over of demand for accommodation.

African Sun operates several hospitality facilities in Zimbabwe and South Africa and stood to draw immense benefits from South Africa’s hosting of the 2010

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