Rejuvenated Rainbow Tourism Group leaps into the digital future

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Prosper Ndlovu

 

HOSPITLITY services operator, Rainbow Tourism Group (RTG), is on rebound after successfully putting closure to all legacy hurdles with focus now directed on consolidating revenue growth and profitability.

Within the group’s package of turnaround strategies, digitisation is seen as the game-changer. The first quarter of 2018 marked the closure of the company’s balance sheet restructuring exercise, which shareholders, the board and management have been seized with since 2012.

The company has experienced a positive growth in revenues and profitability post the recapitalisation exercise, riding on renewed hope ushered in by the new political dispensation under President Emmerson Mnangagwa. In its latest trade update for the five-month period to May 2018, the group indicated the closure on legacy matters has provided the much needed financial stability and strengthened the company’s balance sheet.

RTG had posted a loss of about $5 million in 2017 from $29 million in 2016, having been strained by millions of debts to different creditors that included over $16 million owed to NSSA, other statutory obligations and loan facilities accessed from local and foreign banks.

“Post recapitalisation, the company’s working capital gap has significantly reduced to $2.1 million from $24 million as at 31 December 2017. The proceeds of the transaction were applied towards the reduction of the negative working capital position and repayment of borrowings,” says RTG.

The group sees more positive possibilities ahead being enhanced by the Government’s re-engagement with the international community and the moves to rejoin the Commonwealth group of countries after years of isolation.

“At a hospitality business level, our focus and calling is to be system ready to welcome and host people from all over the world as they come to marvel and transact in this beautiful land we call Zimbabwe,” it said.

In the first five months of 2018, the group’s revenue grew by $1.5 million (16%) to $11.1million in comparison to $9.6 million in prior year. Growth, according to the report, was largely spurred by the notable recovery of the two Harare properties. These are the group’s flagship - The Rainbow Towers Hotel and Conference Centre, whose revenues grew by 44% to $4.4 million from $3 million for the same period in 2017. The New Ambassador Hotel grew by 23% in comparison to the same period in prior year to $727,000.

Looking ahead, the RTG says prospects are brighter and the group is now working on a solid strategy to re-position the company to be the largest and most profitable player in the travel and tourism industry. Embracing digitization is at the heart of its three-pronged approach towards anticipated business upturn.

“Technology will become even more important as the cost of data continues to fall and the availability of other distribution systems such as Wi-Fi become more pervasive. We believe that the future will be driven by technology,” says RTG. The group has already launched the RTG Gateway, an online mobile application, seen as the gateway to a world of travel and hospitality services. The application will be the information portal for anyone who wants suggestions for eating out and all sorts of travel information.

“We will also provide customers with the ability to book and pay online. Our customers will be able to book hotels, not only our own but also partner hotels in excess of 100 at present. They will be able to book and pay for restaurants and many other amenities directly from their smart phones,” says the group.

The other strategy includes rooms expansion to increase capacity in areas with evident potential such as Victoria Falls, Harare and the Eastern Highlands. These would be cemented by value chain optimisation. To that end, the RTG says it has created a tour operation arm, which will specialise in the consolidation of hospitality packages in Zimbabwe and Africa at large targeting the key source markets of USA, Europe and Asia.

“Our United States of America tour operations business will be helping to drive business from source markets. We are focused on growing our share of business from the current 5%,” it says.

Persistent investment in product services as well as service delivery systems has been the cornerstone of growth in RTG. Government’s efforts to re-engage the international community under the “Zimbabwe is open for business” campaign are expected to further help create a conducive operating environment.

“This trajectory is likely to continue after the recent pronouncement of 30 July 2018 as the election date. The company projects an upsurge in both rooms and conferencing business driven by the elections observer missions, media and local bodies involved in the elections cycle. The company has put in place robust strategies to maximise the elections business especially for the city hotels,” says the group.

During the five-month period to May 2018, RTG occupancy grew to 55% from 52% recorded in 2017 while market share increased to 28% against a fair share of 25%. Revenue Per Available (RevPAR) grew by 20% from $35 to $42. A review of the yielding strategy bore fruit as the Average Daily Rate (ADR) also grew by 13% from $67 to $76 for the period under review, it said.

The trade update report shows product improvement remains a critical service delivery attribute for RTG, which has successfully completed the refurbishment of the Victoria Falls Rainbow Hotel in April 2018. All 88 rooms have been fully refurbished with the project having been completed within the planned timelines and using internally generated resources.

“The internal room decor at Victoria Falls Rainbow Hotel is in keeping with the Afro-centric theme that RTG will be rolling out across its hotels, which is designed to give our guests a uniquely Zimbabwean experience. This experience will immerse our customers in a complete sensory experience,” says the group. RTG has successfully completed the first stage of the transition from the ZWS ISO 9001:2008 to the new standard ZWS

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