MEIKLES Hospitality (Private) Limited is seeking to increase its occupancy levels to at least 80%, to be able to liquidate a $9 million loan from the PTA Bank.
BY TATIRA ZWINOIRA
The loan was advanced to Meikles Hospitality in 2013, but the hotelier has been finding it challenging to pay back, amid stagnated occupancy levels standing at an estimated 35%. Speaking to journalists at the end of a tour of Meikles Hotel on Tuesday, Meikles Hospitality commercial director, Thami Mpofu said the 80% increment would have to be sustained over a long period of time when the hotel was fully occupied.
“The $9 million was funded through a loan we got from the PTA Bank and we are still in the process of servicing that loan. We have been working with the PTA Bank since 2013. The volume or the rate of return has not been as fast it should be, because, if the hotel was full and if we were running at 80% or 90% occupancy over a sustained period, then the ability to recoup our investment would come quicker,” he said.
“The guests that we primarily look after here are business visitors. So you find that 80% visitors, who come and stay at Meikles are businesspeople. It produces a trend where you see people arrive on a Sunday or Monday, stay here throughout the week until Thursday, and Friday they are checking out.”
Keep Reading
- Chamisa under fire over US$120K donation
- Mavhunga puts DeMbare into Chibuku quarterfinals
- Pension funds bet on Cabora Bassa oilfields
- Councils defy govt fire tender directive
Mpofu said Meikles Hospitality was constantly reviewing its rates to keep them in line with the state of the economy, but at the same time not lowering international standards. In order to pay back the loan, Meikles Hospitality have been forced to review their rates, he said.
The loan was used to refurbish the north wing of Meikles Hotel, which included putting new bathrooms, television sets, general upgrades to the rooms, and restaurants among others.
Meikles Hospitality is trying to change its strategy to meet current market conditions.
Traditionally, Meikles hotel has remained the most expensive hotel, only attracting upmarket clientele that have since been opting for hotels with cheaper rates.
Mpofu said the weakening of the South African rand has affected their operations, as the neighbouring country was a key source market.
“That is where a lot of our business comes from traditionally, so with a weak rand, with visitors coming into a market that uses a strong currency, it presents challenges for both business people and tourists,” he said.
Occupancy levels of hotels have been on a general decline pushing hotels to target businesses and corporates.