HOSPITALITY concern, Rainbow Tourism Group Limited (RTG), is anticipating a busy second half of the year owing to a strong recovery in its international tourism business.
RTG enjoyed brisk business during the seventh Sadc Industrialisation Week and the 44th Ordinary Sadc Summit held in Harare in August. The group achieved 100% occupancy levels at its flagship property Rainbow Towers Hotel and Harare International Conference Centre (HICC) which hosted the industrialisation week and housed regional delegations for the summit.
The projected increase in revenue will build on the 116% increase in revenue the group had in the half year ended June 30, 2024 of US$18,03 million from the comparable period last year.
“The group remains optimistic about a strong second half of the year, driven by the industry’s recovery, which typically occurs in the later half of the year. The strong recovery in international tourism at RTG hotels is expected to surpass the best-ever performance recorded in post-pandemic years,” RTG chairperson Douglas Hoto said in a statement accompanying the group’s half year financial results for the period ended June 30, 2024.
“Our strategic focus will be on protecting and indeed enhancing profit margins through diligent cost management and the adoption of innovative business models.
“We remain committed to leveraging synergies with our valued business partners and fostering a motivated workforce to create lasting value for our shareholders.”
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The stellar first half has resulted in the group declaring an interim dividend of US$1 000 000 of which US$400 000 (0,016 US cents per share) would be paid in United States dollars and the US$600 000 (0,586 ZiG cents per share) in ZiG.
However, the preparations for the Sadc events resulted in RTG experiencing a decrease in its current ratio to 1,14 as at the end of the first half, from 1,16 recorded at the end of last year.
“The pressure on the business to deliver the product in time for the Sadc Heads of State and Government Summit led to accelerated cash outflows that resulted in a lower current ratio than would have been realised otherwise,” Hoto said.
These outflows led to an overall increase in operating expenses by 97,53% to US$10,74 million for the period under review from the comparable 2023 timeframe.
Unlike the comparable 2023 period, RTG had no net monetary gains leading to its profit after tax dropping to US$1,49 million for the period under review from last year’s US$6,61 million.
During the 2023 first half, RTG recorded a net monetary gain of US$6,81 million.
“The group recorded an increase in volumes during the first six months to June 30, 2024, achieving an occupancy of 52%, a 13% growth from the 46% recorded in June 2023. This growth into RTG hotels has been driven by the return of international tourists, which is now well ahead of pre-COVID-19 levels,” Hoto said.
“Food and beverage and conferencing activities also posted significant growth, with volumes increasing by 35% in the review period.
“As international tourism returns to normal in the Victoria Falls market, the growth trajectory is expected to continue into the industry’s peak season which traditionally lies in the second half of the year.”
In the first half, company completed the major refurbishment works at the Rainbow Towers Hotel and HICC at a cost of US$5 million.
Over the past five year, the group invested US$26 million in product refurbishments, of which US$10 million was invested in the Rainbow Towers Hotel and the HICC.
At the end of June, RTG had a balance sheet of US$54,88 million.