By Shame Makoshori
ZIMBABWE’S second largest hospitality chain, Rainbow Tourism Group (RTG), posted an inflation adjusted pre-tax profit of $164 million during the half year ended June 30, 2021 after trimming costs to ride out the “worst year on record for international tourism”.
This represented a 95% rise from $84 million pre-tax profit during the prior period.
RTG last week said the tourism sector was still reeling from COVID–19-induced blowbacks.
The COVID–19 scourge forced governments worldwide to ground international travel most of last year, pushing global arrivals down by 85%, while Zimbabwean operators suffered US$1 billion in write-downs as traffic plummeted by 90%.
But after rolling out a bold tech- based diversification strategy, RTG pushed revenues up 53% to $706 million from $462 million during the half year ended June 30, 2020, giving it impetus to maintain a positive growth trajectory experienced since coming out of the doldrums in 2012.
Chairman Arthur Manase confirmed the positive spin-off stemming out of the Gateway Stream, RTG’s digital operation.
“The group posted a profit before tax of $164 million, 95% above $84 million posted in 2020. The group posted revenues of $706 million, 53% above $462 million posted during the same period in 2020,” Manase said in a commentary to the financial statement.
“The unprecedented impact of the COVID-19 pandemic has negatively affected international tourist arrivals which … has reduced by 85% in January-May 2021 compared to same period of pre-pandemic year 2019. Despite the grim picture presented by the pandemic, the group demonstrated immense resilience as shown by a strong performance during the first half,” the RTG boss noted.
RTG reported a positive working capital position of $172 million, from $90 million previously.
Manase said the improvement was driven by prudent cashflow management.
He said occupancy rates increased by four percentage points during the period under review, following a sudden rise in demand from the middle of the first half of the year, which defied the peak of the third wave.
Gross margins moved to 67% during the review period from 63% previously, underpinned by the cost reduction measures.
However, earnings before interest, tax, depreciation and amortisation slowed to $161 million, from $177 million in 2020.
The Zimbabwe Stock Exchange-listed RTG operates some of southern Africa’s best tourism gems, including the five-star Rainbow Towers Hotel and the exclusive A’Zambezi River Lodge in Victoria Falls.