African Sun ends Ghana operations, opts for investment strategy

Hotel company African Sun has terminated its lease agreement for its Ghana hotel owing to continued losses. In the group’s unaudited financial results for the year ending September 30, chairman Herbert Nkala said the losses were due to high fixed-costs structure and a slow revenue upturn. According to the Chronicle, losses for the year from its Ghana operations reached $1.97 million, from a loss position of $1.64 million.

Nkala also said the group is moving from its traditional hotel management model to a hotel investment strategy that, he claimed, will be "more optimal" to the needs of the company. Under this model, the group ended its Ghana and Nigerian foreign operations and established five strategic business divisions: which are hotels under management, franchised hotels, the Victoria Falls Hotel partnership, owner-managed hotels and other complementary operations such as Sun Casinos and Sun Vacations.

Looking ahead, Nkala said that after the change of business model, discontinuation of the loss making operations in Ghana and Nigeria as well as the recent retrenchments, the group was in a better position to move from a loss-making to a profit position.

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