The financial position for the tourism and hospitality group, Rainbow Tourism Group (RTG), has remained strong despite the harsh operating environment, the company’s secretary’s Napoleon Mtukwa has said.
The listed group runs the Rainbow Towers Hotel, Bulawayo Rainbow Hotel, Victoria Falls Rainbow Hotel, New Ambassador Hotel, Kadoma Hotel & Conference Centre and A’ Zambezi River Lodge.
“The company’s statement of financial position remains very strong,” said Mtukwa in the group’s latest trading update.
“In spite of the challenges posed by the difficult operation, the company’s liquidity ratio remains strong with a current ratio greater than 1. The company remains solvent and the company is confident of its ability to continue as a going concern.”
During the first quarter of 2020, the RTG recorded a 32% increase in inflation adjusted revenues compared to the same period in 2019 and the growth in historical terms was 740% above same period in 2019.
“This growth was despite the closure of Rainbow Towers Hotel for refurbishment during the first two months of the year,” explained Mtukwa.
“It is essential to highlight that Rainbow Towers Hotel contributes 40% of the Company’s revenues. The company successfully completed the refurbishment of 183 rooms at the Rainbow Towers Hotels. The refurbishment included complete rebuild of guest rooms and suites as well as installation of brand new guest elevators. Following the refurbishment, the hotel now boasts of world-leading rooms.”
Turning to the impact of Covid-19 on business operations, Mtukwa said the temporary closure of hotels during the lockdown period will have a significant impact on the company’s business for the month of April and the first two weeks of May.
“Ordinarily, the month of April contributes 6% to total annual revenues whilst May contributes 7%,” he said.
“The company re-opened four of its hotels in May 2020 and is forecasting business volumes to increase going forward. The opening of hotels will mitigate the overall impact of COVID-19 on business performance.”
Mtukwa added that the group’s prospects for the future especially in Victoria Falls looked positive with potential visitors not cancelling but postponing reservations to the end of year into 2021.
“We remain hopeful that when the pandemic subsides, tourism activity in Victoria Falls will begin to pick up,” he said.