RTG defies Covid-19 impact, posts 17% revenue growth

LISTED hospitality service provider, Rainbow Tourism Group (RTG), achieved a 17 percent growth in revenue to $2,8 billion for the year ended 31 December 2021, despite the ravaging impact on the tourism sector.

The tourism sector was among the hardest hit industries globally after countries implemented lockdowns and travel restrictions to limit the spread of the pandemic.

According to the country’s first National Tourism Satellite Account (TSA), Covid-19- induced global travel restrictions cost the country’s tourism sector an estimated US$690 million as the destination suffered reduced demand for leisure services due to reduced traffic.

However, in its consolidated financial statements for the period under review RTG chairman, Mr Arthur Manase, says the five-month loss of business due to Covid-19 restrictions could not sink the business.

“The group posted revenues of $2,8 billion (historical $2,4 billion) in 2021 against $2,4 billion (historical $740 million) in 2020, which is a 17 percent growth compared to prior year.

“This revenue performance was achieved despite the group losing an equivalent of five trading months during Level 4 lockdowns,” said Mr Manase.

“The 17 percent revenue growth was positive when read together with the United Nations World Tourism Organisation’s 2021 report that global and Africa tourism increased by four percent and 12 percent respectively over prior year.”

He said management and the board responded swiftly by taking decisive actions anchored on innovation that enhanced business resilience.

“The year under review was a stress-test of our business model. Despite the realities presented by the Covid-19 pandemic, the group demonstrated immense resilience as shown by a strong performance,” said Mr Manase.

“I am pleased to report that the group is declaring a dividend. The group’s response to Covid-19 was informed by our desire to protect employees and customers, as well as complement Government’s efforts in fighting the pandemic.”

During the period, the hotel’s business recorded a 29 percent growth in occupancies to 31 percent from 24 percent recorded in 2020.

The group said its major source of business was the domestic market driven by city hotels in key destinations such as Harare, Bulawayo and Victoria Falls.

This saw business volumes improving significantly in the last quarter of the year buoyed by accommodation and outside catering.

Mr Manase commended the Government for the improved access to foreign currency through the foreign currency auction system, which he said resulted in the stabilisation of the local currency against other currencies.

The Reserve Bank of Zimbabwe (RBZ) introduced the auction platform in June 2020 to improve productive sector accessibility to the much-needed forex.

Companies or businesses in the productive sectors such as mining, agriculture as well as agro-industrial sector need foreign currency to import critical raw materials, consumables, machinery and equipment, among others.

As such, RTG says it will continue to capitalise on existing opportunities, which include the growing potential of conducting business online as well as the continued opening up of the economy in various sectors.

On the outlook, the hotelier anticipates that the rooms and conferencing business will continue to recover in city hotels into 2022. The group is also banking on the digital Gateway Stream Platform to play a significant role in its recovery.

The Gateway Stream web and mobile application is a global diversified and unified online
business ecosystem that delivers perpetual, passive and active income through the
ownership of markets where it connects customers with the highest quality of products
and services.
The Gateway Stream initiative has been positioned as a driver of revenue and continues
to capitalise on the opportunities presented by e-commerce.
Going forward, Mr Manase said RTG was well-positioned to grow while maintaining
financial strength, adding that “the Covid-19 pandemic tested the group’s strategy to
the core.
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“The group remained profitable and posted positive cashflows throughout the peak of
the global pandemic. This gives the group confidence of accelerated growth into the
future and superior returns to our shareholders,” he said.-The Chronicle