Page 75 - Gondwana Value Creation Report 2020

HOW WE MAKE AN IMPACT PROFIT: SUSTAINING Financial measures during Covid-19 Growth in occupied bed nights per year 60

OUR IMPACT
number
From the outset, Gondwana’s approach to the uncertainty of the pandemic has been to apply conservative cost
management without sacrificing our values and long-term objectives with regard to conservation, our employees and
%
communities, and financial stability. This has allowed us to safeguard cash flow and ensure durability of our financial
750000
stability for as long as may be required.
600000
Responded timeously and continuously
36
450000 48
The year in review make it abundantly clear that, without a sound business concept, ○ Conducted constant detailed scenario planning in line with changes in our environment Budget
conservative ratios, true values, committed and talented people, an 300000 Projection 24
Controlled our costs through prudence and planning
2020 will most likely be a less enabling entrepreneurial spirit and responsible operational practices, ○ Carried out immediate and aggressive cost controls and cost saving measures at all operational entities 12
no risk management plan could protect nor ensure the survival of
than pleasant memory for most any tourism organisation. ○ Protected cash flow by stopping all outflow where possible 150000
people and organisations in the At Gondwana, we accepted that we do not know how long this ○ Suspended all capital improvements and refurbishments 0 2015 2016 2017 2018 2019 2020 2021 2022 0
race will be. We could not predict when conditions would turn
○ Suspended stock procurement and moved and optimised stock (bar, food, curio, maintenance stocks)
global tourism industry. Never favourable again or what conditions we would be subject to in ○ Applied an immediate embargo on all new appointments, vacancies or replacements with regard to HR Capacity Total occupied bed nights Occupancy
between the lodges
the meantime, nor what the future beyond the pandemic could
in recent history has a single look like. What we did know was that we needed to prepare for ○ Suspended all Board and Board committee fees until further notice
the long haul. We needed to pace ourselves and look after the
event wrought so much havoc people and resources that sustain Gondwana in this race. We also ○ Put maintenance and refurbishments on hold and redirected that facility into cash flow and salaries Occupancy ratios in 2020 were characterised by a 7% growth
in capacity as the new Etosha King Nehale opened, but, due to
on an industry. How do we deal knew that as the race continued, participants would continue Protected our employees’ take home salaries 1 lockdown restrictions, occupancy rates dropped from 50% to 17%.
dropping out. This added pressure, as tourism is the method by
Many tourism-related businesses became distressed during the
with this as a business or as an which we support the matters close to our hearts – conservation, ○ Restricted all overtime and shift allowances as per normal operating procedures and restructured all year, potential for mergers and acquisitions opened up and will be
communities, conservancies and our people and their dependants.
investigated in 2021.
operational employees’ rosters to minimise costs, downtime, leave schedules, operational employee costs
industry? We were left with only one option: survive. ○ Suspended company pension fund contributions (12.5%) after consultation with the people committee
and transport costs to reflect the reduction in occupancies or even complete closure of properties
But survival would mean nothing if we sacrificed our values. We and NAMFISA to reduce total employee costs without initially affecting employees’ take home pay Booking sources (%)
In recent years, a lot of emphasis has been placed on risk
management as an integrated management function. needed to transform Gondwana and operations for the better. ○ Reallocated employees where they were required (instead of shutting down lodges completely) and
Departments were created and staffed, plans developed, theses Survive by focusing on and supporting the key pillars that our reduced employees’ holding costs and removed overtime 19%
written, costs incurred, operations adopted, decisions influenced brands rest upon: people, environment and financial discipline. 25%
and a lot of red tape added to normal business flow. This was all And once we did that, it was simple, shoulder to shoulder, back to Managed our financial risk and flexibility
in the interest of protecting a business against an elaborate list back, we would fight. ○ Managed bad debt by waiving cancellation fees for paid up term debtors and direct customers in distress
of green, amber and red perceived or possible risks, each with While our financials for 2020 might not make for pleasant ○ Restructured overdraft facility while maintaining flexibility in model: overdraft into long-term facility
its own mitigating circumstances and stepped actions to avoid reading, be assured, the fight is not out of this organisation. to save on interest expenses and capital outflow
or shield the impact on profits. Thousands of meetings were Neither financially, nor spiritually. We did what needed to be 2%
held in boardrooms by committees of experts to prepare the done, cutting costs and placing all non-essential programmes on
tourism industry for all conceivable risks, whether material, liability hold. We finished construction on Etosha King Nehale which was Utilised available help 30%
oriented, environmental or financial. Then Covid-19 collapsed already nearing completion, and we continued investing in our ○ Applied for and took all opportunities from financial institutions including social grants and payment holidays 15%
our industry overnight. Big names in the industry, internationally digital capabilities, as these are essential to our future growth and – utilised grants from the Conservation Relief, Recovery and Resilience Facility launched by the Ministry of
acclaimed brands and small one-man operators alike, crumbled, optimisation. Environment, Forestry and Tourism for Conservancies and joint venture lodge employee salaries
folded and suspended activities or permanently closed their
doors despite the most carefully laid out risk management plans. Over the next three years, we expect to grow well. Government Engaged with customers 9%
and policy makers are likely to be more attentive to tourism Namibian Gondwana Card holders (2019: 10%)
This is not to say that there is no value in comprehensive risk going forward, now that its impact is tangible. We are moving to ○ Encouraged postponements rather than cancellations to conserve deposits – our customers postponed SADC Gondwana Card holders (2019: 3%)
management plans or policies or that organisations should not diversify our single industry exposure. their bookings due to their trust in the Gondwana brand Direct reservations/online (2019: 6%)
spend the time and effort to develop those plans. But it does ○ Ran projects to raise awareness of tourism’s plight, such as #SOSTourism, to engage with policy makers Online travel agents (2019: 5%)
Trade groups (2019: 41%)
and government Trade independent travellers (2019: 35%)

1 We were able to protect the 100% take home salary up until the end September, from October there was a voluntary 25% We use booking source allocations to measure the origin and
salary reduction. category of our guests.

72 VALUE CREATION REPORT 2020 GONDWANA COLLECTION NAMIBIA 73