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ZIMBABWE Stock Exchange-listed Rainbow Tourism Group looks set to achieve its set targets after shareholders agreed to implement the turnaround strategies that had been lined up by the new management. The hospitality group had lined up a series of measures aimed at enhancing occupancy, average daily rate, revenue per available room and current ratio. The strategies are the brainchild of new chief executive Mr Tendai Madzivanyika appointed after the departure of Mrs Chipo Mtasa last year.
In the past, RTG shareholders have disagreed on how the company should be recapitalised with property magnate Nicholas van Hoogstraten, who holds 36,5% shareholding, insisting the board should be dissolved as it had allegedly run down one of the country’s largest hospitality group by market capitalisation.
RTG is targeting 50 percent occupancy this year and the rate is projected to reach 55 percent and 60 percent in 2014 and 2015, respectively. A new board led by Mr Joseph Kanyekanye was elected last year.
Speaking at the group’s Annual General meeting yesterday, Mr Madziwanyika said the group had registered a positive second quarter operating performance following the implementation of the strategies.
“This indicates that the measures taken at the beginning of the year to restructure and bring new skills into the business are starting to pay off,” he said.
He said the new team had implemented the different strategies that were aimed at revenue generation, resuscitation of facilities and service re-engeneering as well as maximum utilisation of available resources.
Mr Madziwanyika said the recapitalisation initiatives that had been implemented had had the effect of reducing the cost of funds from 24,6 percent last year to the current 12 percent.
RTG managed to raise $4,5 million through a rights issue at the beginning of this year which was applied towards the retirement of part of the short Aterm debt. The group also attained a $10 million loan facility which was applied to restructuring more of the short term debt into a three year facility.
Mr Madziwanyika added that the refurbishment of the Rainbow hotel and Conference Centre which had been temporarily stopped in 2012 had now resumed.
“We anticipate releasing the first batch of 48 rooms by the end of July and the rest of the rooms by the end of the year,” he said.
He added that the exercise was expected to be completed by the first quarter of 2014.
The group’s revenues have been on an upward trend since the beginning of the year and there has been a marked improvement in occupancy.
“Several hotels under the group are now showing positive occupancy growth rates. The hotels have not only managed to achieve their budgeted revenues but also achieved an improvement in conferencing business and yield management respectively,” Mr Madzivanyika said.
Online Reporter