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Dear Pearl Valley Hotel 12J Investor,
This is a shorter report compared to the previous one since some of the content we would like to communicate is included in the official Pearl Valley Hotel Newsletter for Q1 2022 (issued by Mantis - the hotel operator) - a link of which can be found at the end of this report.
OCCUPANCY LEVELS & ROOM RATES
We are delighted to report that the hotel had healthy occupancies (compared to last year) at a higher-than-expected room rate for the months of Mar and Jul 2022, thus kicking off the 2022/23 financial year (Mar 2022 to Feb 2023) on a strong note.
May, Jun, and Jul are notoriously bad months in the Cape Winelands with occupancy levels dipping below 30%, however with the higher-than-expected achieved room rate, revenue targets are on track and the hotel management seems to be confident that this trend will continue for the rest of the financial year.
Detailed below the achieved average room rate and occupancy level vs. targets for the first 5 months of the 2022/23 financial year (Mar - Jul 2022), compared to the similar period during the previous year that was impacted by Covid-19.
Looking ahead and going into high season the targeted occupancy for the period Aug 2022 to Feb 2023 is set for 44% with an average targeted room rate of R1,509 compared to 30% and R1,246 respectively during the same period the previous year.
At this point I’m sure you are wondering why the average room rate is so low compared to the advertised rack rate? Keep in mind that room nights used by investors through their allotted annual allocation directly impact the average achieved room rate.
2021/22 - FINANCIAL RESULTS
Although hospitality and tourism has gone through turbulent times over the past 2 years, the hotel still managed to show a small profit of R462,710 which was achieved off an occupancy of 31% and an average achieved room rate of R1,178 per night.
Herewith below an extract of the 2021/22 Annual Financial Statements (AFS).
HOW DOES ALL THIS RELATE TO THE NEGOTIATED 6% GUARANTEED RETURN?
Looking at the actual results for the 2021/22 financial year, reported profits translate into a pre-tax return 0.3% vs. the 6% we negotiated on your behalf with the developer for the first year.
NOMINAL RATE PER PERSON PER NIGHT PAYABLE BY INVESTORS
As many of you are aware, the nominal rate of R200 per person per night payable by investors when utilizing their allotted room nights in the hotel has not been updated since inception of the hotel in Apr 2017. After careful consideration Mantis (the hotel operator) has decided to keep this rate unchanged at R200 per person per night, however from 1 June 2022 breakfast will no longer be included in this rate.
PEARL VALLEY HOTEL QUARTERLY NEWSLETTER
We urge you to follow this link to view the quarterly newsletter issued by the hotel which contains additional important information for your attention as an indirect investor in the hotel.
To receive occasional WhatsApp updates regarding your investment, please add Deon Lewis (+27 82 552 9788) as a contact on your phone.
Best, Deon Lewis CEO: Futureneers Capital