By Alois Vinga
LISTED second-largest hotelier, Rainbow Tourism Group (RTG) has recorded a 4% increase in room occupancy including lucrative profit margins.
The hotelier has attributed the attractive returns to currency stability in the country and bullish management practices which defied the odds of the global Covid-19 pandemic.
Presenting the half-year performance of the group for the period ended June 30, 2021, RTG chairperson Arthur Manase attributed the upsurge to management strategies, which tapped into the domestic market.
“Occupancy for the period under review closed at 24% which is 4% above the prior year. The group was largely reliant on domestic tourism due to restrictions on international travel. Business volumes improved significantly from mid-March to June 2021 buoyed by accommodation,” he said.
Conference business during the period was affected by the national lockdown measures with little to no activities for the period between January and mid-March 2021.
However, RTG managed to ride on its technological innovation and other strategies like outside catering as well as the Gateway Stream application revenue channels such as online shopping, hardware, and the music application.
The top hotelier also hailed the obtaining currency stability and improved access to foreign currency as one of the top positives in the operating environment.
“The stability of the official exchange rate and the availability of foreign currency has reduced the impact of inflation compared to the prior year. The expected opening up of the economy will drive tourism business significantly, starting with the domestic market,” Manase said.
Despite business interruption due to the lockdowns, the group posted a profit before tax of $164 million, which was 95% above $84 million registered in 2020.
Gross margins for the period under review closed at 67% up from 63% posted in 2020. The improvement in gross profit margins is attributable to cost reduction measures that were put in place to lessen the effects of low business volumes.
RTG’s financial position remains strong with a positive working capital position of $172 million attributable to prudent cash flow management.
“The group is transforming its business to be technology-driven in all aspects. This will be anchored by the Gateway stream web and mobile platform. The group will continue to explore the various opportunities presented through its digitisation initiatives,” Manase added.
The RTG operates Rainbow Towers Hotel, A’Zambezi River Lodge, Victoria Falls Rainbow, Bulawayo Rainbow Hotel, New Ambassador Hotel, and Kadoma Rainbow Hotel.