eBusiness Weekly
Nelson Gahadza
National harmonised elections are a tale of mixed bag for many businesses in Zimbabwe. Many firms while presenting their updates at times you hear them anticipating a deep in demand due to election related factors.
However, the story is a different ball game all together for hospitality concern, Rainbow Tourism Group (RTG).
The group has positioned itself to cash in on the upcoming general elections as it’s flagship Rainbow Towers Hotel and Conference is the preferred place for setting up the National Command Centre for the elections.
Zimbabwe’s elections are due on August 23, 2023, and already several foreign election observers, media and other missions are in the country, boosting occupancies for several hotels across the country.
While the tourism and hospitality industries see elections as an opportunity, other industries are concerned with the perceived disruptive nature of the elections.
However, RTG will take advantage of the general elections through the opportunities presented by the election season.
“Over the years, Rainbow Towers Hotel and Conference Centre has been used as the National Command Centre for the elections and these elections will be no exception,” said Tendai Madziwanyika, the group’s chief executive officer in the group’s annual report.
He noted the group is pursuing several strategic initiatives as defined in its five-year strategic plan, which runs to the end of 2027.
The strategies contained in the five-year plan are aimed at propelling the business to greater heights, largely through a focus on expansion of the existing room stock in Zimbabwe and beyond.
“The group anticipates a total rebound to pre-Covid-19 levels in 2023 with positive performance across all key indices,” he said.
Meanwhile, the group’s key focus area is debt management in order to build a sustainable balance sheet.
The company has previously been troubled by debts owed to several institutions, such as AfreximBank, PTA Bank, and the National Social Security Authority (NSSA).
However, according to Madziwanyika, the hospitality group has managed to extinguish its debt and maintain a robust plan to sustain its existing solid working capital base.
“Cost containment will continue to be a focus area. This will ensure profitability and an improvement in cash flows,” he said.
Madziwanyika said while the group managed to extinguish its debt, it maintained a robust plan to ensure the existing solid working capital base was 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.
“The company is considering various options that are designed to increase value for shareholders, such as expansion of the group’s hotel portfolio in carefully selected areas around Zimbabwe,” he noted.
According to the group’s 2022 annual report, RTG’s occupancy levels closed at 51 percent, compared to 31 percent in the prior year.
The group has six hotels located in Zimbabwe: two in the capital city of Harare, one in Zimbabwe’s mining town of Kadoma, one in the country’s second-largest city of Bulawayo, and two in the resort town of Victoria Falls.
The Group has the largest convention center in Zimbabwe, the Harare International Conference Centre (HICC), which has a seating capacity of 4 500.
The company is also focusing on technology and digitisation through the activation and expansion of the Gateway Stream web and mobile applications.
Additional focus is on expanding the group’s reach in the tourism value chain through investment in the tour operations arm, Heritage Expeditions Africa.
The country’s tourism sector is considered among the fastest-growing sectors in Zimbabwe as the industry recovers from the impact of Covid-19.
Tourist arrivals are expected to increase to 1,4 million in 2023, while receipts are projected at US$623 million.
Global tourism is on recovery path after taking a nosedive following the outbreak of Covid-19 that saw countries grounding airlines and closing borders to contain the spread of the ailment.
