RTG revenue down 14pct on low conferencing

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HOSPITALITY concern Rainbow Tourism Group (RTG) has recorded a 14 percent decline in revenue to $7,6 million in the quarter to March due to a fall in the number of conferences which traditionally drive revenue for the group.
Rooms sold dropped by 12 percent with occupancies averaging of 36 percent as the group maintained an average room rate of $76.
“This led to the group relying more on individual stay as opposed to the traditional conference market. This is the first quarter to register performance below prior year,” chief executive Tendai Madzivanyika said in a statement to shareholders on Thursday.
He said city hotels were most affected by the shift in the business trend but was optimistic of a recovery after the Bulawayo Rainbow Hotel grew its business by 15 percent following the Zimbabwe International Trade Fair.
Victoria Falls properties posted slight gains of two percent growth in revenues while the group experienced a three percent growth in foreign arrivals in the first quarter from its three traditional source markets – the United States, Europe and Asia.
“Overall arrivals into Zimbabwe as a destination were down by 20 percent in the first quarter, due to the effects of the Ebola virus which had a negative impact on arrivals from Japan, South Korea and China Markets,” said Madzivanyika.
Arrivals from the markets fell 80 percent during the period under review.
“The foreign business segment will remain a growth area and will be driven through the South Africa marketing office.
“The ongoing direct investment in regional and international markets, and the various e-commerce channels will remain key in pushing the resort hotels,” he said.
Despite the challenges, Madzivanyika said the group managed to protect its market share of 25 percent for the quarter.
In a bit to boost revenue, the group introduced low season and weekend promotions which also seek to counter the reduced business activity in all segments.
Turning to its Mozambique hotel, Madzivanyika said it was affected by slowdown in government activities following the 2014 elections but anticipated a recovery in the second quarter.
Meanwhile, the group has reduced the cost of sales by eight percent in the quarter while utility costs fell by nine percent.Advertisement

On the outlook, the group anticipates recovery in the second half of the year , traditionally its peak season.
“Positive signs are evident in the May revenue performance, which closed at five percent above same period prior year,” he said.