Harare- Listed Hospitality Group, Rainbow Tourism Group (RTG)’s revenue for the five months period to 31 May 2019 jumped 131 percent to $25.6 million from $11.1 million achieved in the 2018 comparative period spurred by an increase in foreign currency business received across all the Company’s hotels.
Foreign currency revenues grew by 15 percent to US$4.2 million in the period under review from US$3.7 million recorded in the same period in 2018.
In a trading update to shareholders and analysts on Wednesday, RTG’s chief executive Tendai Madziwanyika said occupancies for the period under review declined to 46 percent compared to 55 percent recorded over the same period in 2018.
“The closure of Bulawayo Rainbow Hotel for two and half months due to refurbishments weighed down the Company’s occupancies during this time,” he said.
“On a like-for-like basis which takes account of the closure for two and a half months of the Bulawayo Rainbow Hotel, the occupancy for the period closed at 54 percent.”
Gross profit margin gained 6 percentage points to 71 percent from 67 percent recorded in 2018 driven by increased rooms and Food and Beverage profitability.
Madziwanyika said the Company is leveraging its foreign currency earnings to drive down costs through the importation of service stocks and product refurbishment materials.
“Negotiations with suppliers on US$ pricing have yielded positive results that have further reduced costs,” Madziwanyika said.
During the period under review, the Company invested US$1.8 million in the Bulawayo Rainbow Hotel refurbishment.
Madziwanyika said the group aims to finish refurbishment of the remaining 54 guest rooms at Kadoma Hotel and Conference Centre by 31 December 2019.
“In December 2019, New Ambassador Hotel will temporarily close for two months to make way for the refurbishment of all 72 bedrooms, replacement of the guest lift and the upgrade of all public areas,” Madziwanyika said.
On the outlook, Madziwanyika said that the group remains optimistic that the business will continue to perform well driven by its foreign currency earning capacity.
Equity Axis News
Raynold Mhotseka is a Journalism and Media Studies student at the University of Zimbabwe. He serves as a news writer at financial research firm, Equity Axis where he is currently on attachment.