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Wilderness betting on weaker rand

Johannesburg - Recently listed tourism operator, Wilderness Holdings, said the weakening of the rand against the dollar since January had helped lift the firm's competitiveness as it had made South Africa more affordable to visitors.

The rand has weakened about 5% against the dollar this year, a development that lowered the cost of travel for Wilderness Holdings' major European and US clients.

"We have become 40% cheaper from around March when the rand started to weaken," said Wilderness CEO, Andy Payne, in an interview.

Set against the stronger dollar, however, is the effect of the sovereign debt crisis in the Eurozone which had led to austerity measures by certain governments.

"The European crisis is going to have an impact for us and will negatively affect our business," said Payne. "But the US is still a major market and we will work to increase our visibility there to counter lower demand in Europe," he added.

Other sources of business could be the high economic growth areas of China and India, although Payne conceded this was not likely "in the immediate future".

The "sudden and heavy impact" of the global economic recession since 2008 has also helped Wilderness reduce its cost base by 13%.

"The recession has changed the way businesses operate. For us, we have had to lower our cost base by 13% in order to match it to the prevailing demand base," said Payne.

"The cost base is now aligned with the demand base and that puts us in a good position for future sustainable earnings."

Wilderness reported a Pula48m (R49m) profit in its first reporting season as a listed entity representing a four hundred fold increase from the P4.9m loss in the year to February 2009.

- Fin24.com 
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