HomeLocal NewsGlobal travel crisis hits Avis, rentals drop 54%

Global travel crisis hits Avis, rentals drop 54%

FIDELITY MHLANGA

AN international travel ban implemented by governments throughout 2020 hit Avis car rental hard, with rental days at the Zimbabwean operation slipping by a staggering 54%, according to the Zimbabwe Stock Exchange listed TSL Limited, which operates the brand in the country.

Avis is one of the biggest sector brands in Zimbabwe, with operations strategically located at major international airports in Harare, Bulawayo and Victoria Falls.

This could explain why traffic dropped, as international arrivals plunged by over 90% during the first 10 months of 2020, after Zimbabwe locked down the economy and shut down ports to fight the Covid-19 pandemic.

TSL reported its full-year financial results to October 2020 last week, with company secretary, James Muchando saying directors had reignited a long cherished ambition to scour the region and unlock fresh opportunities after revenues, profits and volumes slowed.

The giant controls a string of top-end agricultural sector oriented brands in Zimbabwe in addition to companies with interest elsewhere.

TSL’s units include Avis, one of the most respected car rentals brands worldwide, Tobacco Sales Floor (TSF), one of the biggest golden leaf dealers, Agricura, Bak Logistics and TSL Properties.

“Avis’ rental days were 54% below prior year as the business was significantly affected by the ban on both local and international travel during the year as a result of the global pandemic,” Muchando said in a statement accompanying the financial statements.

The travel crisis hit the bigger car rental businesses the hardest from March 2020, when industry pioneer, Hertz Global Holdings joined the Avis Budget Group in laying off workers to cut costs while pressing for the United States government to consider including their sector in any federal assistance provided to travel-related companies.

Hertz started furloughs in March.

Avis said at the time it would be shedding staff as part of more than US$400 million in annualised cost reductions meant to save operations.

In Zimbabwe, other sector players confirmed this week that the situation was tough, with one executive saying the slowdown had taught players to diversify.

Farai Hunde, managing director of Bon Voyage Car Rental said the international flights ban had affected the sector.

“The international ban of flights in 2020 due to pandemic has seriously affected the car rental business negatively,” he told businessdigest.

“At Bon Voyage Car Rental we mainly served foreigners and returning residents and due to the flight ban we struggled to get business. We used to get about 70% business from foreigners and 30% from locals. However, it opened our minds to realise that there is also a big opportunity locally as we started engaging companies, non-governmental organisations and individuals,” he said.

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