THE Don Group recently reported that its positive growth trend had been considerably dampened in the financial half-year ended December 31, 2008, by economic and inflationary woes fuelled by the fluctuating oil price and high interest rates.

The group states that operations in the current difficult climate were exacerbated by an inescapable rise in costs of suppliers and a significant decline in travel spending by the corporate market, traditionally a mainstay of Don's suite hotel business. This was further aggravated by the oversupply of hotels in Rosebank and Sandton fighting to retain market share of dwindling travel numbers.
 
The Don's imperative of refurbishing all its nine hotels to high standards, and financing this continuing commitment internally, also impacted on the financial results. In their report to shareholders, non-executive chairperson, Salukazi Dakile-Hlongwane, and chief executive, Thabiso Tlelai, said: "Given the record revenue achievements and healthy bottom-line results reported for the financial year-ended June 30, 2008, the overall interim results make uncomfortable reading. To be sure, the board of directors in the last two reporting periods cautioned against too high expectations, given the then threat of economic turmoil and, wherever possible, took such counter measures as were possible to protect profitability."
 
Although the corporate market segment is not delivering business to previous levels, the Don group has seen discernible growth in other areas. These include business sourced by travel agents and tour groups, the Internet (with emphasis on cross-border business) and a segment comprising self or private business bookings. Still wary of the prevailing economic situation, Dakile-Hlongwane and Tlelai added: "With the current refurbishment of two hotels, the phased withdrawal of suites will continue to impact on suite availability and occupancies. The Don is addressing its marketing and sales resources to exploit wider segmental opportunities to maintain viable occupancy levels in the remaining months of the current financial year. We are aware that this will not be easy. We are confident that, with completion of the refurbishment programme, Don will have suite hotels second to none, capable of competing in the market."