Hospitality concern, Rainbow Tourism Group (RTG) says continued foreign market growth, expenses rationalisation and balance sheet restructuring have set the group on a better financial footing with growths in the top line and occupancy being realised for the year ended 31 December 2017.
The group’s revenue grew by 12 percent to $27 million compared to $24,1 million recorded during the same period in the prior year with occupancy also increasing 4 percent to 57 percent during the period under review, compared to 55 percent in 2016.
Group chief executive officer Tendai Madziwanyika told an analysts briefing that the growth was necessitated by a comeback from foreign markets especially Europe and the Americas.
“We are starting to gain back our traditional foreign markets and we are registering a fair growth from all our foreign visitors. South Africa remains dominant with 8 015, US 4 936, Germany 5 541, China 1 646 and UK with 2 375”, he said.
Madziwanyika said foreign revenues registered a 10 percent growth to $8,9 million from $8,1 million recorded in 2016 while its cash-cow Victoria Falls hotels also posted a 14 percent revenue increase from prior year.
He added that the company is optimistic of continued positive trajectory following the opening up of the Victoria Falls International Airport which is facilitating international travels into the country.
The group’s finance director Napoleon Mtukwa said during the trading period, the group employed several cost reduction measures that saw operating expenses going down by 16 percent from $21 million in 2012 to $14 million this year.
The company’s gross profit grew to $17,7 million from $16,5 million in the prior year, with EBITDA improving significantly to $4,3 million. Profit before tax closed the trading period at $553 000 from a loss of $3 million recorded in the prior year.
Meanwhile, capital expenditure reduced to $1,7 million compared to $2,8 million used in the same period in the prior year, with inventories remaining nearly flat at $2,5 million.
In terms of outlook, Madziwanyika said the group is embarking on a huge expansion drive to upgrade and widen up operations in high demand areas, with the Vic Falls Rainbow Hotel set to be fully refurbished in two weeks’ time while A’zambezi is already complete.
“For a complete transformational change, the group is aiming for a full expansion of all our existing stocks, greenfields and gateway where we partner with property investors and digitization to attract foreign investors and at the same time add efficiency to both domestic and international customers”, said the group.
RTG also hinted that the group is open to franchise opportunities as part of efforts to maintain positive growth.