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Cost cutting Rainbow Tourism Group sees 7 pct revenue boost
14/06/2014 00:00:00
by Business Reporter
Cost-cutting strategy to continue ... Tendai Madziwanyika

RAINBOW Tourism Group’s revenues for the first four months of the year grew by seven percent to US$8,7 million, up from US$8,1 million during the same period last year, due to cost cutting measures adopted last year.

Speaking at the company’s annual general meeting last week, chief executive Tendai Madziwanyika said the number of rooms sold over the same period increased by 16 percent in 2014.

“This resulted in an occupancy growth from 38 percent in the first four months of 2013 to 44 percent in the first four months of 2014,”he said.

Madziwanyika said during the first four months of the year, the company’s Zimbabwe revenues increased to US$8,2 million from US$7,7 million, representing a seven percent increase.

This was attributed to improved performance by the resort hotels and the Rainbow Towers Hotel and Conference Centre.

The A ‘Zambezi River Lodge recorded revenue growth of 25 percent over the corresponding period last year whilst the Rainbow Towers Hotel and Conference Centre recorded a 10 percent growth in turnover.

“The Group experienced significant growth in conferencing business during the period under review," said Madziwanyika.

"This increase resulted in growth of revenues of 12 percent from prior year for food and beverage for the Rainbow Towers Hotel and Conference Centre.

"We anticipate this trajectory to continue. The positive performance during the stated period compares favourably to the growth in rooms revenue and therefore points to the efficacy of the RTG Mobile strategy.”

He said the Bulawayo Rainbow Hotel performed well during the 2014 Zimbabwe International Trade Fair period, achieving "a 24 percent increase in revenues as compared to ZITF 2013".

The group adopted several low season promotions to boost revenues while e-commerce revenues for the period increased by 19 percent over prior year.

International arrivals into RTG grew by 13 percent over the same period last year.

Contributions from the South African office continued to increase significantly, and the results are evident through enhanced revenues for the Victoria Falls properties.

Revenue contribution for the quarter from the South African office grew 51 percent above prior year. Overall foreign business revenues for the group grew by nine percent above prior year whilst domestic revenues were up seven percent.


“In regional hotels, performance for the Rainbow Hotel Mozambique has been depressed,” Madziwanyika said.

“However, the group has since implemented revenue generation strategies to drive the Mozambique business and we project positive take-off in the business unit’s revenues in the months ahead.”

Meanwhile, the sustained increase in revenues was supportive of the group’s strategy of consolidating its dominance of the Zimbabwean leisure market despite a subdued environment and a declining client activity rate.

“Rainbow Tourism Group achieved a first quarter market share of 28 percent, which was a 22 percent increase from the 23 percent achieved during the same period in 2013. The Group’s fair share is 25 percent.

“Historically, second half revenues contribute 60 percent towards the Group’s yearly revenues. A similar ratio is anticipated this year,” said the chief executive.

Going forward, he said, the group would continue with its disciplined approach towards managing costs and implementing further cost reduction strategies at the same time enhancing quality standards.

“In (an) economic environment in which revenue streams are depressed, we believe cost management is where the game will be won and lost for the foreseeable future,” Madziwanyika added.

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