Rainbow Tourism Group (RTG) says it has continued to trade profitably despite the harsh economic conditions the hospitality concern has been subjected to for the greater part of 2020 as a result of the Covid-19 containment-induced lockdown.
As part of measures by the government to curb the spread of Covid-19, President Emmerson Mnangagwa on March 30 placed Zimbabwe under lockdown resulting in loss of significant revenue by tourism players as the country’s borders remained shut.
In their trading update for the period ended 30 September 2020, RTG company secretary, Napoleon Mtukwa said the group had managed to weather the Covid-19 storm.
“During the nine months to September 2020 the group’s inflation adjusted revenues closed at ZWL$586 million,” said Mtukwa.
“The EBTDA (earnings before interest, taxes, depreciation, and amortization – a measure of a company’s overall financial performance) margin for the period under review closed at 35% margin, which is 3 percentage points above prior year. This resulted in a positive cash position which was driven by the cost containment measures. Despite the challenging operating environment, we are pleased to report that the group managed to close the nine months in a profit position.”
However, the group’s cumulative occupancy, Mtukwa said, declined to 22% from 47% recorded in the prior year.
“The main driver of the decline was the global Covid-19 lockdown restrictions,” he explained. “The temporary closure of the Rainbow Towers Hotel and Conference Centre (which is 40% of the business) for refurbishment during the first three months of the year, also contributed to the decline in occupancy.”
Mtukwa said RTG remained optimistic about prospects into the future pinning hopes on domestic tourism continuing to drive business activity in the remainder of the year.
“The group will be driving holiday packages around the country in order to enable residents to get outdoors and experience their country,” he said.
“In recognition of the long cycle nature of the international bookings, the group remains actively engaged with our regional and international tour operator partners and representatives in filling the long pipeline. So far reports indicate that Africa remains amongst the continents least affected by the pandemic. The group’s strategy for the next 18 months will focus on emerging opportunities that are awash on the African continent.”
The resuscitation of regional airlines such as Airlink which has partnered Fly Emirates to provide air services to 20 destinations in Africa, Mtukwa said was a major boost for the recovery of inter-Africa travel.
“To capitalise on this development, the group will drive local and regional holiday packages into the Victoria Falls region,” he said.
“The group is expanding the scope of the Gateway Stream platform with the launch of Gateway Stream Music in December 2020 which will further enhance the group’s revenue generation efforts.