2012 TPSEA Annual Report - Serena Hotels

The Managing Director’s Report
Mr. Mahmud Jan Mohamed
Managing Director
The Company for the fourth consecutive
year successfully navigated through a
rather challenging business landscape
for the tourism industry in East Africa
and I am delighted to note that TPSEAL
recorded an impressive performance and
higher growth levels compared to the
previous year.
The Serena Group’s “Built to Last”
attribute has for over four decades
been continuously reinforced through
implementing its business model and
focusing on its long-term prospects with
a balanced risk management approach.
This has seen the Group expand its
operations geographically and positioning
itself in all strategic locations in the East
Africa region; a situation which has
resulted in the Company benefiting
from cost and management synergies
in a pro active and structured manner,
thus contributing positively to the
financial performance of the Company.
The Company continues to face the
challenges associated with the global
economic crisis and the recent Euro
zone crisis, security concerns and the
resultant travel advisories issued by
source market governments. However
during the period under review,
despite the challenges, business levels
in destination Kenya, Tanzania and
Zanzibar gradually improved in the
leisure market segment which was
complemented by increased activity
within the corporate and domestic
market segments. It was unfortunate
that the leisure and corporate travel
bookings to Kenya were negatively
impacted during the last quarter of
2011 as a result of the travel advisories
issued by foreign government agencies
due to the security risks which
continues to be of concern during the
first half of year 2012.
During the year 2011, the Group
continued to implement a more
creative and pro-active marketing
strategy in response to the rapid
changes in the trends of customers’
preferences following the dynamic
economic climate. Intensified
marketing activities were carried out in
a cost-effective, efficient and diversified
manner to continuously pursue new
opportunities and enlist new source
markets, increase the brand outreach and
drive incremental business. The Group
participated in various promotional
activities, trade fairs and regional sales
trips with special packages developed
to increase occupancies from the
various source markets. The Company
continued to establish and strengthen
contacts in new markets in line with
our diversification strategy coupled with
efficient yield management to ensure
that the Company optimised every
opportunity.
I am pleased to report that the increase
in the number of visitors has led to
a healthy increase in revenues and
earnings per share. For the year 2011,
TPS Eastern Africa achieved a turnover
of KShs. 5.5 billion (2010: KShs. 4.5
billion), an improvement of 22.0% and
a Profit Before Tax of KShs. 853 million
(2010: KShs. 693 million), a 23.1%
improvement. The commendable results
have been achieved despite the volatile
economic environment characterized by
inflationary pressures due to increased
energy and food costs, volatile exchange
rates and increased interest cost.
Going forward, additional energy savings
are expected to be realised in year 2012
Dar es Salaam Serena Hotel
Swimming Pool at Dar es Salaam Serena Hotel
16 TPS EASTERN AFRICA LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS 2011