RTG targets 1500 rooms

CLOUDINE MATOLA

Publicly traded hospitality group, Rainbow Tourism Group (RTG), is embarking on an ambitious expansion drive that will see its room inventory increase to 1500 by 2028, as it moves to unlock value from underutilised spaces across its hotel portfolio.

The strategy, which focuses on converting offices, storage areas and other non-revenue-generating spaces into hotel rooms, is expected to increase the group’s capacity by 270 rooms over the next 12 to 15 months.

RTG chief executive officer Tendai Madziwanyika told Business Times the expansion is aimed at meeting rising demand from both domestic and international travellers while maximising returns from existing assets.

The initiative will increase the group’s room inventory to about 1250 from the current 879 rooms, before a further expansion to approximately 1500 rooms by the end of 2028.

“Across the whole group, what we are going to be doing over the next 12 to 15 months is to increase the capacity of what we already have,” Madziwanyika said.

“If you look at this hotel, we currently have 24 rooms that are being used as offices. We have targeted to convert them back into hotel rooms because we sometimes experience shortages in accommodation.

“Across the group, we will create another 270 rooms within our existing properties over the next 12 to 15 months. That will take the group to about 1250 rooms, up from 879, where we had remained for a long time.

“Beyond that, by the end of 2028, we will add another 130 or so rooms in Cape Town. We are firmly focused on reaching approximately 1500 rooms within the next two years.”

As part of the expansion programme, RTG has also significantly increased capacity at Montclair Hotel by converting previously underutilised spaces into guest accommodation.

“We realised that Montclair had spaces being used for storage, offices and other purposes,” Madziwanyika said.

“We converted those into hotel rooms. By August 31, 2026, we will have completed a full refurbishment of Montclair. It is no longer an 85-room hotel; it is now a 110-room property after creating an additional 25 rooms from previously unused spaces.”

The group is also pressing ahead with its capital expenditure programme, targeting investment of just under US$6 million this year, funded entirely through internally generated resources.

“In the first half of 2026, we invested US$1.7m, mainly in the refurbishment of Montclair Hotel and completing sections of A’Zambezi River Lodge, including extensive re-thatching works,” Madziwanyika said.

“By July, capital expenditure had reached almost US$2.4m. Our full-year target is just under US$6m, which includes refurbishment works at Kadoma Hotel and completion of the Montclair project. The funding is coming entirely from internally generated resources.”

RTG is simultaneously advancing its flagship Cape Town development, which is expected to require a total investment of about US$25m.

Madziwanyika said the group has already invested approximately US$7m in acquiring and preparing the property, with a further US$18m required to complete the project.

“We acquired the property for about US$5m and have invested additional capital since then, bringing total investment so far to around US$7m. We still need to invest another US$18m, taking the total project value to approximately US$25m,” he said.

He said RTG is considering a combination of equity, bank financing and capital market instruments such as real estate investment trusts (REITs) to finance the development.

“There are several financing options available to us. Part of the funding can come through additional equity, while the balance can be raised through bank loans sourced either in Zimbabwe or South Africa. We can also utilise structures such as REITs,” Madziwanyika said.