CRESTA Hotels recently relaunched its flagship Cresta Lodge Hotel in Msasa, Harare after spending US$1,3 million on refurbishment of the property over one year. It plans to spend a similar amount to freshen up Cresta Churchill hotel in Bulawayo. The group operates five properties in Zimbabwe: Cresta Churchill; Cresta Jameson, Cresta Lodge, Cresta Oasis, all in Harare, and Cresta Sprayview in Victoria Falls. Zimbabwe Independent senior reporter Tatira Zwinoira (TZ) caught up with Cresta Hotels managing director Chipo Mandela (CM) to talk about the group’s drive for a fresh appeal. Find below excerpts of the interview:
TZ: You say for Cresta Lodge, you forked up US$1,3 million. What were you looking to do?
CM: Cresta Lodge is a 171 bedroomed hotel. We upgraded all the bedrooms. This was a soft refurbishment, meaning that we were looking at mainly addressing the ambience, addressing the contents of the room, addressing our bar, addressing our conference centres, and also addressing the public areas.
We decided to spend money in those areas because we are cognisant that travellers have become modern, they are discerning, and they are demanding top quality products, and we don't want to be left behind. We want to make sure that we correctly position our hotel, Cresta Lodge, so that when the visitors do come in they find us with a lot of modernity and also we are relevant in terms of the experience they will be seeking.
We also refurbished our restaurants, we refurbished our bar, we refurbished our reception foyer, Cool Beans Coffee Shop, and all our corridors.
We put in a dynamic door locking system which allows you to check in without coming through reception.
You can physically check in from your phone. We are able to send you the app, wherever you are, and you are able to just walk in and check into a bedroom.
We learned from Covid-19 that our guests are demanding more and more for less interaction, and we've just embraced that, and we're very excited.
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You know, when Covid was amongst us, at its peak, people were not keen to interact. And we are saying yes, we are coming out of Covid but how do we prepare for business now and into the future?
So, we want to make sure that we propel that and when our guests come through, they have that option. If they want to talk to us, it's okay.
If they do not want to talk to us, it’s okay. Say maybe another bout of Covid breaks out again we will be able to handle them without any interaction with our guests.
TZ: This investment started from which year?
CM: It started in 2022. That's when we started refurbishing this hotel.
We've taken a year, the whole of last year, and early into this year to complete the refurbishment.
TZ: Where did the money for the project come from the organisation itself or the parent firm Masawara Holdings?
CM: It came from our working capital as an organisation.
Again, we were recipients of the duty exemption regime that has been introduced by the government, so it really helped us because a lot of the stuff that we use for the project was imported.
So, we're able to bring it in without paying the relevant duties.
TZ: Where does the bulk of your business come from?
CM: Cresta Lodge is a business hotel. When I say it's a business hotel we are located on the outskirts of the city.
The bulk of our business is conferencing, however, there is a marriage between conferencing and accommodation, so people come to stay with us as they conference with us. That's where we get the bulk of business. However, we also have the food and beverage offering in our business, but the bulk of our business comes from accommodation.
TZ: In terms of price point, do you cater for low income earners?
CM: Yes, definitely. We cater for a wide array of guests. Yes, business is quite predominant. We’re also a family hotel: we also cater for individual travellers. We also cater for what we call FITs (fully independent traveller) but anybody who wants to come in and look for a room to stay with us, we are able to accommodate them.
TZ: Let’s talk about the elephant in this market: the currency exchange. How has that been affecting your company across the board, not just at Cresta Lodge?
CM: You will appreciate that as tourism, we are at the tail end of the value chain. We do not manufacture anything; we are price takers so it has really been affecting us because we take the prices that our suppliers are giving us. And with that, it has been difficult for us because when they increase their prices, we then also have to increase our prices because we are price takers in the market. So, it is a challenge but we are dealing with it. We hope that they will be pronouncements to assist us as we navigate the terrain.
TZ: Does that mean, in other words, that suppliers are not following normal exchange rates when they're pricing you?
CM: Very true. They are charging prices that they charge which they endeavour are suitable according to their business models. And, as I mentioned, we are price takers so we then cannot influence those prices because we are right at the end of the value chain.
TZ: How much would you say in terms of percentage is your business forex compared to local currency across the board?
CM: We’ve seen the foreign currency inflows increasing, we're excited about it. It is not at the levels that we were pre-Covid-19 but we are continuously monitoring to see if we can be able to increase the uptake in terms of the forex inflows that come in.
But there is also a lot of support domestically, which we're very excited about as well.
TZ: Are you able to tell us the exact ratio?
CM: I would say maybe 60% domestic and 40% foreign.
TZ: That's an improvement from the Covid-19 period, right?
CM: It is an improvement during Covid-19 but prior to the pandemic, those ratios were more foreign and less domestic. But, I mean, we’re excited that the domestic market has supported us, it has carried us through Covid and it's still looking after our businesses as we wait for the international markets to open and they can travel freely.
TZ: Which one of your properties is generating more revenue?
CM: Cresta Lodge is our flagship in the group. It’s got 171 bedrooms and in Zimbabwe with 519 bedrooms. So, in terms of percentage, our significant chunk of our revenue comes from Cresta Lodge. And also, given its location and the quality of the product, it is an appeal to regional and international markets as well outside of Victoria Falls.
TZ: Do you intend to invest on refurbishing your other hotels and if so, how much are you going to be spending in the second half of the year in terms of capital on the other properties?
CM: Hotel refurbishment is done in cycles of four to five years if it is a soft refurbment or 10 years if it is a hard refurbment. When we say it is a hard refurbishment, this is when you do the brick and motor issues. We have been consistently refurbishing our properties from 2013 and we have done all our properties now and as a group we have spent about US$15 million.
And right now, we are going back to those hotels and sprucing them up again. Our next destination is Cresta Churchill in Bulawayo where we will be undertaking another refurbishment to make sure that we reposition the product, but we also continue to offer our guests a pristine product.
TZ: How much money are you going to be investing in Cresta Churchill, and when are you likely to start the work there?
CM: I think the second half of this year into next year is the refurbishment of Churchill and we are earmarking to spend about US$1 million
TZ: Apart from the pricing issue, what other challenges are you facing, and what is in store for Cresta going forward?
CM: Pricing remains a key challenge. I mean, as you are aware, we’ve got currency challenges in the country, and it remains a real challenge. As I mentioned, we are price takers, and it’s very difficult to influence the value chain but given that we are managing, what's in store for Cresta? We are looking at growing. We are looking at repositioning our products, which we've already done here at Cresta Lodge. From here, we’re going to Cresta Churchill and then we'll be going to Cresta Sprayview in Victoria Falls. And we are also looking at growing within the borders of this country.
