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RTG Sees Profit Growth As Hotel Occupancy Rise

Rainbow Towers

Rainbow Tourism Group (RTG) posted a 90 percent profit growth (historical) for the full-year ended December 2022 on the back of improved occupancy at its hotels and a general uptick in operations.

Business operations across all segments have outpaced pre-pandemic levels.

In its FY-22 results, the group said occupancy levels at its hotels increased to 51 percent which reflected a 65 percent growth from previous year levels and saw group revenue reach  ZW$ 17.3 billion from ZW$ 2.4 billion in 2021, in historical terms.

Volumes improved significantly during the year under review buoyed by accommodation, outside catering, Heritage Expeditions Africa activities as well as Gateway stream revenue channels such as online shopping and the music application.

City hotels conferencing business recorded positive performance during the year.

“The positive growth reported in 2022 is expected to continue into 2023 as the world tourism activities return to preCovid-19 Pandemic levels. The Group has recorded a sustained recovery of international tourists in 2022 and the trend is projected to accelerate going forward,” the group said.

During the year, the Group successfully installed a 300 KVA hybrid solar system at the Kadoma Hotel and Conference Centre. This solar system comprises a 100 KVA battery system to provide energy during times of power cuts, as well as a 200KVA grid tie system directly feeding into the national grid. This investment in green energy has significantly reduced the hotel’s energy

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The Group has declared a final dividend of ZW$500 million out of which US$250,000 will be paid in foreign currency and the balance in local currency. This will bring the total dividend to shareholders for the year to ZW$880 million (equivalent to US$1.5 million), of which US$500,000 is in foreign currency.

The Group managed to extinguish its debt and maintained a robust plan to ensure the existing solid working capital base is sustained.

“We do not believe these positive developments are aptly reflected in RTG’s share price which currently trades at a discount to its net asset value,” said the group.

In line with its diversification strategy, RTG intends to expand its hotel portfolio in strategic areas across the country as well as focus on improving technology and digitization through the activation and expansion of the Gateway Stream mobile application.

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