RTG bounces back

Mernat Mafirakurewa Business Editor
ONE of the country’s leading hotel chains, Rainbow Tourism Group Limited (RTG), posted an after tax profit of $1,1 million for the full year ended December 2013 from a loss of close to $6 million as various cost cutting initiatives bear fruit.Overall Group revenues grew by 6 percent to $29,3million with the Zimbabwe operations leading the growth with a 9 percent increase in revenues.

Domestic revenues grew by $1,4 million while foreign reviews grew by $1 million. Occupancies grew by 15 percent to close at 54 percent against 47 percent in the previous year.

The hotel group experienced a growth of 26 percent from International tourist arrivals in 2013 which is double the national average growth of 13 percent in 2012.

The Rainbow Towers Hotel and Conference Centre recorded the highest occupancy of 76 percent in May 2013 and another record occupancy of 78 percent in November 2013. The South African office achieved revenues of $2,5 million in 2013 compared to $1,5 million in 2012.

Average revenue per room grew by 16 percent from $29,500 in 2012 to $34,100 in 2013.

The hotel group restructured its balance sheet resulting in a reduced funding gap of $3,8million of $9,4 million the previous year.
To achieve the reduction in costs, RTG said various measures were implemented including; the centralisation of the procurement function which achieved a 16 percent reduction in costs equivalent to $500,000.

Through the use of energy saving gadgets and light bulbs as well as extensive use of gas throughout the kitchens, RTG achieved an overall reduction in the electricity bill of 18 percent.

During the year under review 20 employees were fired for various acts of fraud that cost the company in excess of $1,5 million in revenue leakages over a period of three years.

RTG chief executive officer Tendai Madziwanyika said he was pleased with the perfomance of the Group in achieving the turnaround adding that the responsiveness of the business to cost reduction, tightening of operational controls and revenue generation are self evident.

“We will consolidate our gains in Zimbabwe to consolidate our dominance in the domestic market; we will work closely with our RTG Virtual partners to achieve this.

“People are a key component in our business. Going forward we will focus on training and development programmes that will be sure to deliver refreshing hotels, amazing experiences every time,” said Madzivanyika.

Going forward the group plans to dispose of the Matetsi lodge “Harthaway Investment/TA as Matetsi water lodge which was previously reported as a discontinued operation as at 31 December 2012 is undergoing the process of liquidation. The final liquidation order was granted in December 2013,” RTG chairman John Chikura said in a statement accompanying the results.

The Group in January opened the Rainbow Beitbridge Hotel. The hotel is expected to spur activity in Beitbridge.