ZIMBABWE’S second largest hospitality group Rainbow Tourism Group (RTG) generated a lot of cash resulting in an earnings increase of US$1,6 million for the interim period ending June 30 from US$152,014 over the same term last year.
During the period under review revenue had grown by four percent to US$13,2 million and occupancy for the group rose 10 percent to 43 percent in line with the year-end target at 50 percent. The group is targeting a market share of 28 percent by year end.
Chief Executive Officer Tendai Madziwanyika said he was happy to report that the company performance was in line with several of its key objectives set as strategic pillars for the successful turnaround of the company from a loss position to profit position at the beginning of the year.
“The first strategy adopted focused on restructuring the balance sheet,” he said.
“This resulted in the company successfully converting its short term debt to long term debt from a US$10million loan facility. The Group also successfully conducted a rights issue, raising US$4,5 million which went towards debt restructuring.
“Stopping the bleeding through cost reduction was the second strategy adopted. The Company had to change the way it conducted its business. Cost reduction was the first line item to respond positively to all the measures adopted. The result was a reduction in costs by 12 percent which was a US$1, 6 million reduction.
“However it is important to note that implementation of all cost reduction initiatives was done in accordance with global performance indices and does not in any way compromise on service and quality.”
The group, in the quarter under review, increased its revenue generation capacity. Several promotional packages where launched in the market and of significance was the successful launching of the RTG Virtual platform.
Revenues increased by 4 percent from US$12, 7 million in 2012 to US$13,2 million in 2013 whilst occupancy increased by 10 percent from 39 percent in 2012 to 43 percent in 2013.
The group was pleased to report a 17 percent increase in market share from 23 percent in 2012 to 27 percent in 2013 against a fair share of 25 percent.
The re-modelling of the commercial department to include a centralized sales team, increased channel management through e-commerce and the introduction of promotional and proprietary programs over the past six months contributed immensely to the increase in revenues and occupancies by the group.Advertisement
The group has started to benefit from the impact of the restructuring of the commercial department albeit a soft performance at the beginning of the year. This restructuring was a base for future positive performance.
Giving an update on the Group’s refurbishment program and projects, Madziwanyika said Rainbow Towers Hotel had released the first 60 room completed under the exercise in July. The hotel is expected to be completed by January of 2014.
The group had two major refurbishment programs lined up for Bulawayo Rainbow Hotel which will approximate US$1,1 million and Kadoma Rainbow Hotel and Conference Centre which will have an additional refurbishment cost of US$850,000.
Rainbow Beitbridge Hotel, the group’s new 3 star business hotel is set to be opened at the beginning of November, management said.