RTG reduces operating costs by 17 percent

Roberta Katunga, Senior Business Reporter
@robertakatunga
HOSPITALITY concern, Rainbow Tourism Group (RTG) has seen operating costs for the first quarter of the year go down by 17 percent on new innovative cost reduction measures.

In a statement on Friday, RTG said over the four months period from January to April, the group reduced costs by $1,3 million compared to the same period last year which saw Zimbabwe hotels registering strong performance in the first quarter.

“It is evident that the company is now benefiting from the cost reduction journey implemented since 2013. Over the period 2013 to 2015 total operating costs reduced by $5 million year on year,” RTG said.

The hospitality concern said group revenue registered a 13 percent growth of $1 million to $8,6 million compared to $7,6 million in 2015 while occupancy grew to 48 percent from 38 percent recorded in the prior year. The statement also highlighted the group’s increased market share of five percent.

“Revenue generation programmes will remain the main driving force for growth in the domestic and foreign markets,” said RTG.

However, Rainbow Hotel Mozambique reportedly continues to record declining revenues year on year, with the subdued performance being attributed to the country’s political instability. Rainbow Hotel Mozambique’s revenues were down by 46 percent compared to the same period last year.

“This subdued performance is attributable to the current political instability in Mozambique. We will continue to keep a close eye on the performance of this unit.”

Going forward, the company said it was now focusing on rebuilding its balance sheet to create a sustainable capital structure which will be key to the completion of the turnaround journey.

On the closure of Rainbow Beitbridge Hotel last month, RTG said the furniture, fittings and equipment were removed from the hotel and transferred to Rainbow Towers, New Ambassador and Bulawayo Rainbow while employees affected by the closure were offered alternative employment within the group.

Rainbow Beitbridge Hotel was closed on 31 May following the termination of the lease agreement with the National Social Security Authority (NSSA) with RTG claiming that in its two years of operation the hotel had recorded unsustainable losses.