By Edward Mukaro
LISTED hospitality and leisure group, Rainbow Towers Group (RTG) has overcome a 25% cumulative occupancy decline compared to the prior year to post ZW$586 million in its inflation-adjusted revenue for the period ended 30 September 2020.
Naturally, like most businesses in the hospitality industry, the global COVID- 19 induced lockdown restrictions that saw occupancy declining to 22% from 47% recorded in the previous year adversely affected RTG’s performance.
Said RTG, “Q3 trading performance during the nine months to September 2020, the Group’s inflation-adjusted revenues closed at ZW$586. The EBITDA margin for the period under review closed at 35% margin, which is 3percentage points above the prior year.”
This resulted in a positive cash position, which was driven by cost-containment measures.
“Despite the challenging operating environment, we are pleased to report that the Group managed to close the nine months in a profit position,” said RTG.
The temporary closure of the Rainbow Towers Hotel and Conference Centre (which is 40% of the business) for refurbishment during the first three months of the year, also contributed to the decline in occupancy.
RTG noted that at the height of the pandemic, June 2020, the Rainbow Towers Hotel and Conference Centre provided quarantine facilities for 1400 returning citizens. This provided the group with experience, thereby, establishing market leadership in handling guests given the challenges posed by COVID- 19.
During the quarter, the Gateway Stream was named the overall winner in the innovation and technology category by the prestigious Zimbabwe Independent Quoted Companies Survey 2020.
In response to the dire impact of COVID- 19 on the tourism sector government, this year unveiled a ZW$ 500 million stimulus to try and cushion the industry.
This was part of ZW$18 billion Economic Rescue and Stimulus Package was 9% of the country’s gross domestic product or 28.6% of the 2020 National Budget.
Minister of Tourism and Hospitality Nqobizitha Ndlovu said then: “As a central government, we acknowledge the challenges being experienced by tourism businesses during this time, hence the need to support the industry and communities to cope with the negative effects of this pandemic.”