Harare hotels boost RTG performance as revenue rises 16%

Business Writers

HARARE – Rainbow Tourism Group (RTG) posted a 16 percent growth in revenue to $11,1 million in the five months to May 2018 from $9,6 million recorded in the prior year.

The growth in revenue was spurred by the notable recovery of two Harare properties, the group’s flagship, which is the Rainbow Towers Hotel and Conference Centre whose revenues grew by 44 percent to $4,4 million from $3 million for the same period in 2017. The New Ambassador Hotel grew 23 percent to $727,000 in comparison to the same period prior year.

RTG chief executive Tendai Madzivanyika told the group’s annual general meeting that persistent investment in product offering has been the cornerstone of this recorded growth.

“Government’s efforts to re-engage the international community under the “Zimbabwe is open for business” campaign have helped to create a conducive operating environment.

“This trajectory is likely to continue after the recent pronouncement of the election date. The company projects an upsurge in both rooms and conferencing business driven by the elections observer missions, media and local bodies involved in the elections cycle. The company has put in place robust strategies to maximise the elections business especially for the city hotels,” said Madzivanyika.

Occupancy for the hospitality group grew to 55 percent from 52 percent recorded in 2017 while market share increased to 28 percent against a fair share of 25 percent.

Revenue Per Available (RevPAR) grew 20 percent to $42 from $35. A review of the yielding strategy bore fruit as the Average Daily Rate (ADR) also grew by 13 percent from $67 to $76 for the period under review.

Madzivanyika said product improvement remains a critical service delivery attribute and the company successfully completed the refurbishment of the Victoria Falls Rainbow Hotel in April 2018.

All 88 rooms for the Victoria Falls Hotel are now fully refurbished with the project having been completed within the planned timelines and using internally generated resources.

Having successfully put closure to all legacy matters RTG is now working on a solid plan to re-position the company to be the largest and most profitable player in the travel and tourism industry.

He said the first quarter of 2018 marks the closure of the company’s balance sheet restructuring exercise. Shareholders, the board and management of the company have been seized with the exercise since 2012.

The closure of the transaction has provided financial stability and strengthened the company’s balance sheet. Post recapitalization, the company’s working capital gap has significantly reduced to $2,1 million from $24 million as at  December 31, 2017.

The proceeds of the transaction were applied towards the reduction of the negative working capital position and repayment of borrowings.

The hospitality group has managed to experience positive growth in revenues and profitability post the recapitalization exercise.

Related Articles

Leave a Reply

Back to top button