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RTG bucks Covid threats, posts profit

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DESPITE the Covid-19-induced disruptions to business, listed hospitality group Rainbow Tourism Group Limited (RTG) recorded a strong performance for the full year to 31 December 2021, supported mainly by its Gateway Stream mobile and web platform in line with expectations.

ALEX MHANDU

Group chairperson Arthur Manase also attributed the performance to the traditional hospitality business with its robust cashflow streams and the new tour operations arm that is identified as a key enabler of travel and experience tourism.

Launched in 2018, the Gateway Stream has been positioned as a driver of revenue and continues to capitalise on opportunities presented by e-commerce after it recorded a four-fold growth to 16 000 active subscribers in 2021 from 15 000 in 2020.

During the year under review, the group’s total revenue jumped 17% to ZW$2.8 billion although the group lost an equivalence of five trading months during level 4 lockdowns. Revenue per average room jumped 26% to ZW$3 940.

“The 17% revenue growth was positive when read together with the United Nations World Tourism Organisation’s (UNWTO) 2021 report that global and African tourism increased by 4% and 12% respectively over prior year,” said Manase.

The UNWTO envisages that domestic tour[1]ism will lead the global tourism recovery in the world market, which is in line with the RTG drive to dominate domestic tourism development through its owned and partner hotels, together with the tour operations arm: Heritage Expeditions Africa (HExA).

“In addition, the group will use the domestic market as a launch-pad to drive Gateway Stream revenues from regional and international markets, through a strategic activation of regional rooms and retail products on the online platforms,” said Manase.

 During the year under review, profit before tax of ZW$249 million and an after-tax profit of ZW$218 million were achieved. Occupancies in the hotel business improved to 31% from 24% recorded in 2020 supported mainly by the domestic market driven by city hotels.

According to the group, business volumes improved significantly in the last quarter of the year buoyed by accommodation and outside catering. It is anticipated that rooms and conferencing business will continue to recover in city hotels into 2022.

The tour operations — HexA — has continued to grow into a significant player within the tour operations and adventure space in the country’s major resorts and business centres. The operation was significantly disrupted during this Covid-19 pandemic period, mainly as a result of the high human contact nature of its activities.

But the group remains optimistic about the prospects of this business and will capitalise on the existing synergies within the group to aid its strong recovery going forward. RTG utilised ZW$92 million in capex during the review period with projects mainly focusing on capacitating the new business units as well as the basic care and maintenance of the hotels.

Management is upbeat of group prospects with accelerated growth into the and superior returns to shareholders projected.

Manase said: “We believe that the group is well-positioned to grow while maintaining financial strength going forward. The Covid-19 pandemic tested the group’s strategy (and) the group remained profitable and posted positive cashflows throughout the peak of the global pandemic.”

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