eBusiness Weekly
Michael Tome
RAINBOW Tourism Group (RTG) says its operations are set to grow in the current financial year on the back of the world opening up for travel and other businesses.
The hospitality group indicated it will continue to take advantage of the sustained opening up of the economy in various sectors that are relevant to RTG’s hospitality business.
RTG now has three main segments in its business portfolio comprising of tour business, gateway streaming services and the traditional hotels business.
According to RTG, there is high optimism in the gateway stream business as evidenced by the exponential growth pattern in subscriptions which surged by 340 percent to 66 000 in 2021 from 15 000 in 2020.
The group’s hotel business is projected to continue recuperating in city hotels as the year proceeds, a stance that will potentially bolster the revenue per room as well as the conferencing business, while the tour business expects growth driven by the group’s intention to capitalise on existing synergies within the group.
Generally, the hospitality sector is looking up a good start after a two year battering of the sector by the Covid-19 induced travel restrictions and lockdowns across the globe.
According to the United Nations World Tourism Organisation’s (UNWTO) 2021 report, Global and Africa tourism increased by four percent and 12 percent respectively over the prior year.
A multinational professional services network, Pricewaterhouse Coopers (PwC) hotels forecast for 2022 shows there will be green shoots of recovery in the sector in the course of the year as demand begins to surge, which is an encouraging indication.
The hospitality sector’s life is likely to return to 2019 levels as international travel is projected to return to normal by April 2022.
However, the overall hospitality sector performance is not expected to reach the pre-pandemic levels during the course of this year.
“We believe that the group is well-positioned to grow while maintaining financial strength going forward. The Group 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 the various sectors that are relevant to our business,” said Arthur Manase, RTG board chairman in the statement accompanying the group’s financials for the year to 31 December 2021.
In the course of 2021 RTG posted a 54 percent decline in profit before tax to close the year at $249 million in inflation-adjusted terms, while the average daily rate (ADR) retreated by three percent.
Revenue grew to $2, 8 billion in the period translating to a 17 percent growth as the occupancy rate improved to 31 percent from the prior year.
According to RTG, the group’s resilient performance during the Covid-19 pandemic stricken period was driven by technological innovation through the Gateway Stream mobile and web platform, coupled with positive outcomes in the newly introduced tour operations arm, which the group termed “a key enabler of travel and experience tourism”.
“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.
“The operating environment was affected by successive outbreaks of new variants of the Covid-19 virus that resulted in the group losing five months of operations due to the strict level 4 lockdown regulations,” said Manase.
RTG declared a dividend of, $0.06 per share in respect of the financial year ending December 2021.
According to the UNWTO panel of experts, 61 percent of tourism professionals see better prospects for 2022, mostly during the third quarter while 42 percent point to a potential rebound only in 2023.
The speed of the tourism and hospitality sector recovery in 2022, will be determined by the pace and size of the return of tourism, international and domestic business.
