Hospitality giant Rainbow Tourism Group (RTG) has continued to stand strong and has yet again posted an operational profit of ZW$343 million in its 2020 full year financial results.

This was achieved despite tourism both globally and locally having been the industry worst affected by the COVID-19 pandemic. The Group has consistently posted profits since 2017, testament that the business fundamentals are now strong.

“I am pleased to report that the Group posted a Profit Before Tax margin of 39%, up from 29% recorded in 2019, whilst Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) margin closed at 42%, a growth of 31% compared to 32% posted in 2019” stated the RTG Board Chairman Mr. Arthur Manase in the RTG 2020 full year financial results.

He further highlighted that the growth in EBITDA was mainly because of various cost reduction initiatives adopted during the year in response to the lower business volumes. The net margin for the year closed at 39% in 2020 compared to 29% in 2019.

Manase reported that the Group’s statement of financial position closed on a positive note. “During the year, the Group repaid the debenture of ZW$16.7 million in full. This instrument was issued in February 2018 at an interest rate of 6% and tenure of 7 years. The early repayment of the debenture released the Group’s assets which were pledged as security” he said. As a result, the Group closed the period with a gearing of 1%. This is a significant milestone which demonstrates that the Group is now debt free. Prior to its turnaround in 2012, gearing stood at a staggering 70%.

It is during this reporting period that the Group activated the Gateway Stream mobile and web application which made a positive impact on the Group’s profitability. Manase reported that before the arrival of the COVID-19 pandemic the Group had positioned itself as a tech-driven business and had already undergone three years of development in this area. As the COVID-19 pandemic lockdowns were declared, the Group was able to optimize this asset light model and take advantage of the challenges of the COVID-19 pandemic which led to the growth of business in the digital space.

“Gateway Stream has been positioned as a driver of revenue and continues to capitalize on the opportunities presented by e-commerce. The platform houses several revenue generation channels which are expected to drive revenues in 2021 and beyond” he said.

The Group completed the refurbishment of 183 rooms of its flagship the Rainbow Towers Hotel & Conference Centre during the first quarter of 2020 at an investment of US$4.4 million.

The refurbishment exercise which commenced in December 2019, was completed in a record three months. For the first time in the industry four different contractors were used to ensure timeous completion of the works.

In interview RTG Chief Executive Tendai Madziwanyika said “Our timing was fortuitous as the refurbishment was completed two weeks before the introduction of the national COVID-19 lockdown. The Group was able to successfully bid for the returning citizens employed by international cruise ships requiring mandatory quarantine. This was at the height of the pandemic where all cases were imported.”

He advised that the Group’s COVID-19 protocols, as guided by the World Health Organisation and the Ministry of Health and Child Care, were put to the test.

“We are proud of our employees for their discipline in adhering to the protocols which ensured that none of the hoteling employees tested positive for COVID-19 nor was there any transmission among the few quarantine guests who tested positive” he said.

During the period under review the Group’s two Victoria Falls hotels remained closed for most of the year leaving the city hotels to sustain the Group. In response to the adverse impact of the COVID-19 pandemic most hospitality companies quickly moved to rationalize their workforce by embarking on retrenchment of employees to survive the difficult operating environment.

“RTG is proud to have contributed to the national cause and vision 2030 for Zimbabwe to become a middle class economy by 2030 by preserving jobs as the Group did not retrench any of its employees despite the industry being hit hard by COVID-19” said Madziwanyika.

“Despite the two Victoria Falls hotels being closed for most of the year we managed to keep all our employees on a salary. This was achievable as the city hotel employees all contributed to the reduction of costs which helped to sustain the salaries of those at home.

RTG is the employer of choice that prioritizes the livelihood of all its employees especially during the most difficult times” he said.