Mamvura’s market minute

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Art managed to recover to its January 1 level on Friday (only to lose it again on Wednesday), meaning there was only one counter in the minus on a year-to-date RTG. The prospects don’t look good either following NSSA’s purchase of FML’s stake at the beginning of October.
Certainly this settles one thing: The company is no longer in play and it is unlikely to attract any of the hot money about.
That said, RTG has been far from an attractive investment in the period since the ragtag hotels of the Zimbabwe Tourism Investment Company (ZITC) were privatised.
The group’s genesis had been the failure of several hotels in the wake of dissident crisis in the early 1980s. Both the Rainbow Hotel and Ambassador Hotel (Pty) Ltd, which included A’Zambezi, failed within a week of each other in November 1983 and were eventually acquired by government.
In the period since RTG was listed in 1999, shareholders have come and gone (Accor, Terra Partners, Econet) and the core that have remained have been diluted (Govt of Zim and the Libyans).
The group has gone into lodges and regional operations, exiting both. Recapitalisations and fights with “Mr Nick” have dominated the better part of the last decade. To observers, RTG’s six hotels fall into three divisions — PDF (Per Diem Facilities) in Kadoma and Bulawayo, TOH (Tired Old Harare) and RVF (Republic of Victoria Falls).
The first two are marginal and the last one has huge potential. The PDFs will continue to tick over so long as the donors stick about as will TOH.
It is worth noting that no major hotels have been constructed in Harare since the CHOGM Summit of 1991 — anyone even considering it would aim for Borrowdale.
So the value in this group is in RVF, especially given their location in Victoria Falls, but expansion is going to need lots of money.

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