RTG set ambitious growth target

STAFF WRITER

Publicly listed hospitality group, Rainbow Tourism Group (RTG), has set an ambitious growth trajectory, targeting to double its revenue to US$100m from the current US$50m, driven by new revenue streams, regional expansion and a robust pipeline of strategic investments.

Chief executive officer, Tendai Madziwanyika, said the group is already building strong momentum, underpinned by an unprecedented 35% growth recorded in the first quarter.

“We are targeting a US$100m business revenue from US$50m. If you look at our performance, we are at US$50m right now, and in the first quarter we grew 35%, which has never happened before,” he said.

Madziwanyika attributed the strong performance to an aggressive acquisition strategy that has expanded the group’s asset base, boosted volumes and consolidated market share.

Recent acquisitions including Montclair Hotel and Casino in Nyanga, MSK House in Cape Town, South Africa, and Batoka Safaris in Victoria Falls have emerged as key growth drivers, strengthening both revenue streams and RTG’s strategic positioning across regional markets.

RTG board chairperson, Douglas Hoto, said the group’s financial position remains solid, with total assets rising 28% to US$82.7m, up from US$64.5m in the prior year.

“This growth was driven primarily by the strategic acquisition of assets, namely Montclair Hotel and Casino in Nyanga, MSK House in Cape Town, South Africa, and Batoka Safaris, a destination management entity based in Victoria Falls,” Hoto said.

The group delivered solid top-line growth in FY2025, with revenue increasing 13% to US$50.3m from US$44.4m in FY2024, supported by innovative strategies and the continued strength of its diversified hospitality and tourism portfolio.

Hoto noted that the newly acquired units were rapidly integrated into operations and are already contributing meaningfully to performance.

“Montclair Resort and Conference Hotel was incorporated into operations effective March 1, 2025. Batoka Safaris was consolidated into the group’s revenue from June 1, 2025. Both entities contributed 8% of total group revenues,” he said.

Madziwanyika said the results reflect a deliberate and resilient commercial strategy anchored on diversification and agility.

“These results illustrate a robust commercial strategy that has enabled RTG to grow volumes and expand market share while maintaining a strong revenue base,” he said.

“The growth reflects the group’s deliberate, diversified strategy and its ability to respond swiftly to changing market dynamics. Our resilience stems from not relying on a single revenue stream and our capacity to continuously innovate and adapt.”

He added that internal efficiencies and disciplined cost management are beginning to translate into improved margins.

“We have been very deliberate about managing our costs while enhancing operational efficiencies, and that is now reflecting in our margins. Initiatives such as the RTG Agro project, where we produce key fresh items like vegetables are significantly reducing costs while improving quality for our guests,” he said.

The group also recorded a surge in foreign currency earnings, driven by increased international travel and growing conferencing activity, particularly in Victoria Falls.

“The increase in foreign currency earnings is underpinned by stronger international travel and rising conferencing activity. The acquisitions we made this year are part of a broader strategic plan to position the business for future growth,” Madziwanyika added.

Hoto said the group’s strategic investments have enhanced its valuation and strengthened investor confidence.

“These investments have not only reinforced RTG’s market position but also improved its overall valuation. We are optimistic about the year ahead, supported by strong demand, a strengthened portfolio and a solid foundation for growth,” he said.

However, the expansion drive came with short-term cost pressures. The group incurred US$1.6m in acquisition-related expenses during the year, weighing on earnings.

“As a result, EBITDA closed at US$7.9m compared to US$9.7m in 2024. Despite this temporary impact, the acquired assets are expected to drive revenue growth and support margin expansion in future periods,” Hoto said.

Despite this, profitability metrics improved, with gross profit margin rising to 74% from 70%, supported by stringent cost controls and operational efficiencies.

“The group achieved a strong uplift in profitability margins during the year, driven by disciplined cost management,” Hoto said.

The performance was achieved against a challenging operating environment characterised by liquidity constraints and reduced NGO-related business following the withdrawal of donor funding by key international partners.