Page 4 - Gondwana Value Creation Report 2020

ABOUT GONDWANA A test of 2020 tested the limits of the tourism industry’s endurance. It led

us to reflect on where we’ve come from and where we’re going.

FAITH AND ABILITY We had prepared for an excellent season that would bear the fruits ○ Allowing travellers from countries with 30 or fewer new put the plan in motion during the year and received approval post
of the labour we had invested in recent years. Our people, systems
year-end. We also constantly conducted scenario planning and
infections per 100 000 inhabitants over a two-week rolling
average
and structure were geared for a superb performance. Covid-19 was
costs or take opportunities.
still only an occasional news story out of the Far East. ○ Requiring medical travel insurance specifically covering crunched numbers to see what could or had to be done to cut
Then everything changed. Namibia, like the rest of the world, began Covid-19 We pursued our business interruption claim with our insurer from
closing its doors to its friends and its visitors, and suddenly, all of ○ Requiring travellers to present a negative Covid-19 test prior to the start of the crisis. We notified our insurer as early as the end
4 Actively responding to the unfolding pandemic us were very alone. Because the world opened asynchronously, we boarding a plane and to take another on arrival of March 2020 of our claim for business interruption cover. By
essentially lost our whole year of business. Many tourism industry ○ Housing travellers at fixed addresses for the first three nights June 2020 we submitted a preliminary quantification summary of
operators were left with a terrible prognoses. Survival became the while these test results are produced the claim. At year-end our insurer still has not confirmed whether
prime consideration in an unprecedented environment. Worse, you they will honour or reject our claim.
cannot make bookings to prepare for its return because there is no ○ A fixed itinerary to trace travellers
guidance on when that will be. You survive by keeping a level head ○ Strict protocols at all lodges in accordance with international We suffered insured losses due to the Covid-19 outbreak
and by working together. benchmarks to limit physical interactions between employees and measures implemented by the government as a result of the
and guests pandemic outbreak.
Our stakeholders made extensive Of course, these measures could not provide guarantees in terms We decided to take the matter to the High Court of Namibia to
compromises. of eliminating infections, but more stringent measures, such as compel the short-term insurer to honour its agreed commitments.
two weeks of quarantine on arrival, would discourage travellers
Government created a Stimulus Relief Package of N$8.1 billion
from coming at all. And keeping our borders completely closed (4% of Namibia’s gross domestic product (GDP)), of which
Our shareholders did not receive a dividend this year. Our entire came at a severe cost. Tourism companies were now holding on by N$5.9 billion was earmarked to support businesses, households
Board gave up its sitting fees. Our employees and management a thread and could not continue doing so for much longer. More and cash flow acceleration payments for services rendered by
universally bought into 12% benefit cuts as from April and a 25% than 120 000 Namibian employees stood to lose their livelihoods. government. This included wage subsidies for tourism workers,
salary reduction from October, while the executive directors’ tax breaks for non-mining corporates and temporary provisions
reduction was over 40%. All Gondwanians have worked hard Our prudence and principles for salary reductions to protect jobs. The provision was admirable
to save the company, which is a testament to their faith in the for a developing country, although it had a small impact on our
business, and the business’s shrewdness in having chosen to work have protected our business and ability to keep our employees’ livelihoods secured.
with them.
our people.
No retrenchments. Where to from here?
We were held in high esteem by analysts and officials who wanted
The Board lobbied government constantly to find a sensible to know how we remained operational despite losing almost all of Many businesses will fail, which means that consolidation should
be expected, hopefully as an opportunity to help save livelihoods
balance between reopening our borders and keeping Namibians our projected revenue. The answer is the same as ever: prudence. that would have been destroyed otherwise.
safe. We felt that the number of infections in Namibia did not We had not grown our business on debt, nor did we use
justify the extreme lockdown and its impacts on our economy. customers’ deposits to fund our activities. As such, we had a low Concerningly, latest data shows that international travellers have
gearing and survived this year without shirking our environmental been slow to return to the economy in the wake of the ‘Great
As a large industry player in or social commitments. Lockdown’, although anecdotal reports suggest modest recovery.
By October, for a period of time, Namibia was considered a low risk
Namibia, we, together with Suppliers protected and area by Germany, Switzerland and Austria, among others, meaning
others, took on an advocacy role. community investments that governments trusted us as a safer travel destination due to
our low infection rates. In the wake of this terrible pandemic, we
maintained. have the chance to grow Namibia’s visibility on the world stage of
We suggested more reasonable measures, including: tourism.
○ Opening Hosea Kutako International Airport, to begin with There were vast numbers of cancellations, and the weakening
○ Approving and attracting international airlines from key Namibian dollar meant that international travellers suffered up
destinations and connection hubs to service Namibia with to 30% foreign exchange losses on their deposits. We decided
regular flight schedules to open a bank account in Germany to hold deposits in their
○ The publishing of clear health and safety protocols for tourism original currency and protect against these types of losses. We
and related industries
VALUE CREATION REPORT 2020
2 V AL UE CREA TION REPOR T 20 20 GONDWANA COLLECTION NAMIBIA 3