Chronicle Editor
Oliver Kazunga, Senior Business Reporter
LISTED hospitality and leisure services company, Rainbow Tourism Group (RTG), has recovered US$2.8 million from total legacy debt it was owed locally and regionally.
In the hope to salvage something out of its US$1,9 million trapped in the failed Capital Bank, RTG in 2017 took legal action against the financial institution but to no avail.
Outside Zimbabwe, in the neighbouring Zambia, the hospitality group was owed US$900 000 by Savoy Hotel Limited.
In a financial statement for the year ended December 31, 2019, RTG chairman Mr Arthur Manase said:
“On legacy matters, the group finally recovered US$1,9 million owed by Capital Bank (then Renaissance Merchant Bank). Recovery was in the form of 3,6 percent of the issued shares in First Mutual Holdings Limited.
“The group also successfully recovered US$900 000 owed by Savoy Hotel Limited in Zambia which had arisen out of a breach of a 2010 preference share subscription agreement and a management agreement.”
Mr Manase said the closure of the debt matters has ensured shareholders recover their lost value and that focus was now on growing shareholder value into the future in a sustainable manner.
He said RTG has broadened its tourism value chain to not only focus on hotels as the group has successfully set up Heritage Expeditions (Private) Limited, a wholly owned local tour operations and activities entity.
“The company has already commenced transfer tours, quad bike safaris, white water rafting, packaging of third-party activities as well as invested in an adventure park at the Rainbow Towers Hotel in Harare.
“In the United States of America, the company has set up RTG Incorporated, doing business as Journeys by Exotic and wholly owned by RTG Zimbabwe.
“This is an international tour operations entity in which the company will be selling destinations around the world to Americans,” he said.
Mr Manase said during the period under review, the group’s product refurbishment plan was underpinned by the desire to make all its hotels world leading.
“To that end, the group invested $42 million (approximately US$6,2 million) into hotels refurbishment in 2019.
“During the first quarter of the year, the Bulawayo Rainbow Hotel was temporarily closed in an exercise, which involved the upgrade of bathrooms, full replacement of the hot and cold water reticulation system, replacement of exterior windows, upgrade of soft furnishings in rooms and the replacement of guest elevators.”
At the Rainbow Towers Hotel, he said the group has undertaken a rebuilding exercise involving the gutting down and reconstruction of the entire guest rooms and bathrooms for 187 rooms.
“Going forward, the group will continue with the refurbishment exercise to complete the process of making all the hotels world leading,” said Mr Manase.
Despite the turbulent times experienced during the year, the hospitality concern’s revenue grew by 62 percent to $454,6 million from $279, 8 million in the relative period.
The growth in revenue was also despite a significant drop in occupancy levels from 61 percent to 23 percent.
RTG attributed the decline of 2019 occupancy levels to the group’s decision to shut Bulawayo Rainbow Hotel between January and February last year for renovations, shedding four percent in occupancy levels in the process.
The hotel group’s foreign business revenues modestly surged to close the period under review with a foreign business income of US$11,2 million translating to a one percent growth compared to US$11,1 million percent recorded in the prior comparable period, while the e-commerce channel earned the company US$2 million from US$1,8 million in 2018. — @okazunga.
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