Fears of a pandemic showed up again after Africa witnessed two outbreaks of Marburg virus in Tanzania and Equatorial Guinea, in which the first infection was confirmed in February.
The World Health Organization (WHO) reported that the Marburg virus disease, which first was identified in Equatorial Guinea in February and then in Tanzania in March, is highly lethal and results in hemorrhagic fever with a mortality rate of up to 88%. This virus belongs to the same family as the Ebola virus. The symptoms of a Marburg virus infection, including high fever, severe headache, and severe malaise, develop all at once. The virus spreads from infected fruit bats to humans via direct contact with contaminated bodily fluids, surfaces, and objects.
There are currently no vaccinations or approved antiviral treatments for the virus.
Similar to the unprecedented emergence of the COVID-19 virus nearly four years ago, the new virus outbreak is now becoming a new global negative sentiment and could pose a threat to the tourism industry and businesses related to the sector.
CGS-CIMB Securities (Thailand) on Wednesday anticipated a limited impact for specific Thai hotel operators with properties in Africa, including Minor International Pcl. (SET: MINT).
MINT has no hotel in Equatorial Guinea but seven hotels in Tanzania. Together with its two hotels in Mauritius, which were ordered to close down for three months by the local government on April 16, MINT has nine hotels (out of 531 hotels) that may be affected by the virus outbreak.
Assuming that these nine hotels have to be closed for three months, the impact on MINT’s 2023 net profit would be 0.3%, which is still insignificant, in CGS-CIMB’s view. However, if these nine hotels have to close for six months, the impact would be 0.6% of MINT’s 2023 net profit.
However, if the virus outbreak were to spread throughout Africa in the worst case scenario, the impact would be about 2% of MINT’s 2023 net profit if MINT has to close down these hotels for three months as MINT has 50 hotels in the continent. Most of MINT’s hotels in Africa are small hotels. Thus, even though these 50 hotels formed 9% of its total hotels, the number of rooms would be only 4%, based on CGS-CIMB estimate.
MINT has 2 hotels in Mauritius with a combined 344 rooms. This represents only 0.4% of MINT’s total hotel rooms by the end of 2022. Therefore, the impact of the closure in MINT would be insignificant.
