Rainbow Tourism Group (RTG) continues to demonstrate resilience in a highly volatile business operating environment as occasioned by the COVID-19 pandemic environment.
The Company delivered a strong balance sheet in its full year 2021 financial results and is now debt free. The RTG Board Chairman Mr. Arthur Manase in his chairman’s statement reported that “the Group maintained a robust capital and liquidity position. The Group’s financial gearing ratio was maintained at1% while current ratio closed at 1.18 from 1.15 in 2020.”
The Group repaid the debenture of ZW$16.7 million in 2020, which was a milestone achievement as this was at the height of the uncertainty of the COVID-19 pandemic. 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. The repayment of the debenture reduced the Group’s gearing to 1%, which it has managed to maintain.
This is in comparison to a 70% gearing in 2012, The debt instrument enabled the Group to restructure its balance sheet and put closure to the last of its long-standing legacy issues.
The Group has been able to pursue its growth trajectory given the strong financial position with a focus on technological innovation by way of the Gateway Stream mobile and web application platform.
“The Gateway Stream business continues to grow. The 2021 performance has shown a remarkable growth performance of the various channels within the business entity. I am pleased to report that the platform is now accessible free of data charges on some internet service providers and mobile network operators in Zimbabwe’ he said.
“There is considerable traction for the new revenue channels as evidenced by the four-fold growth in active subscribers on Gateway Stream to 66,000 in 2021 from 15,000 in 2020.” The Group is harnessing the scalability capacity of the Gateway Stream which will catapult its growth trajectory.
Inflation adjusted revenues at ZW$2.8 billion grew by 17%, compared to ZW$2.4 billion achieved in 2020. “The 17% revenue growth was positive when read together with the United Nations World Tourism Organisation’s (UNWTO) 2021 report that Global and Africa tourism increased by 4% and 12% respectively over prior year” said Manase. According to the UNWTO report domestic tourism will lead the global tourism recovery in the world markets.
“ This is in line with the Group’s drive to dominate domestic tourism development through its owned and partner hotels together with the tour operation arm: Heritage Expeditions Africa (HExA). In addition, the Group will use the domestic market as a launch-pad to drive Gateway Stream revenues from regional and international markets through a strategic activation of regional rooms and retail products on the online platforms” he said.
The Group declared a dividend for its shareholders, “on behalf of the Board of Directors, I am pleased to advise shareholders that the company has declared a final dividend of ZW$0.06 per share”. The dividend will be paid to the shareholders on or before 12 May 2022.
Occupancy for the period under review grew by 29% to 31% from 24% attained in 2020.This was achieved despite the Group losing five months of operations due to the strict level 4 lockdown measures in the first half of the year.
The Group recorded a 25% growth in arrivals during the period January to December 2021 compared to 2020. This growth was mainly driven by domestic tourism and arrivals from Africa and Asia. Increased activity in the city hotels, which constitute 67% of its hotels portfolio, was the key contributor to the growth. Performance of the resort hotels which is traditionally driven by the international market, remained subdued during the year. The resort hotels were busiest in the last month of the year as locals took advantage of the eased lockdown restrictions.
Other positive key performance indicators include the Revenue Per Available Room (RevPar) which grew by 26% compared to 2020. RevPar represents the revenue generated per available room.
The Group continued on its pursuit to improve guest experience through the investment in product refurbishment. Manase reported that in 2020, the Group invested in the upgrading of Rainbow Towers hotel guest rooms and two guest elevators. The remaining works which were stalled by COVID 19 lockdowns have resumed and expected to be completed during the second half of the year.
These include the refurbishment of suites as well as the installation of a third elevator. The third elevator is now installed and was commissioned on 30 March 2022.
He further reported that the Group is in the process of fully refurbishing New Ambassador Hotel. The works include the refurbishment of rooms & public areas. The installation of a brand-new guest elevator commenced in January 2022 and is now complete. This is the first time since construction that the hotel replaced its elevator.
The rooms refurbishment works will commence in the second half of the year to complete the facelift of the hotel and firmly position it as a city centre boutique business hotel.
Currently structural works of selected blocks of the Kadoma Hotel and Conference Centre are underway, focusing on the replacement of the entire roofing and accompanying aspects such as ceilings, modernisation and freshening of the affected rooms.
In his outlook Manase was confident in the future performance of the Company “the Group remained profitable and posted positive cashflows throughout the peak of the global pandemic. This gives the Company confidence of accelerated growth into the future and superior returns to our shareholders” he said.