Rainbow Tourism Group has delivered a bullish verdict of the first nine months of 2020 despite a huge slowdown in business caused by COVID-19 pandemic restrictions and a major refurbishment induced shutdown during the course of the year.
In a trading update for the third quarter, the company, one of Zimbabwe’s big tourism industry players, focused on upside reporting saying the business closed the nine months with a positive working capital position, a refurbished five-star hotel and repaid its debenture three years ahead of schedule.
“This was achieved despite the closure of the Rainbow Towers Hotel for five months from January to March 2020 for refurbishment and from April to May 2020 due to COVID-19 restrictions.”
Rainbow Towers and Conference Centre comprises 40% of the company’s business.
During the nine months to September 2020 the group’s inflation adjusted revenues closed at $586 million. The EBTDA margin for the period under review closed at 35% margin, which is three percentage points above prior year. This resulted in a positive cash position which was driven by the 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”.
At the height of the pandemic commencing June 2020 the Rainbow Towers Hotel and Conference Centre provided quarantine facilities for 1400 returning citizens.
However, the group’s cumulative occupancy declined to 22% from 47% recorded in the prior year.
The main driver of the decline was the global COVID-19 lockdown measures and the temporary closure of the Rainbow Towers Hotel and Conference Centre for refurbishment during the first three months of the year.
The remaining hotels were closed for four months from April to July 2020. The Victoria Falls hotels remain an area of special treatment for the company having been worst affected by the closure of international borders and cessation of international flights.
Global tourism activity remained subdued into the third quarter of 2020 as the COVID-19 pandemic continued to ravage many of the international source markets.
Many countries slowed down the reopening of their economies and some reinstated partial lockdowns to protect vulnerable populations. While recovery in China has been faster than expected, the global economy’s long ascent back to pre-pandemic levels of activity remains prone to setbacks.
“The Company has adopted several measures to ensure business continuity whilst actively monitoring the rapidly evolving situation. These measures include the adoption of WHO prescribed Personal Protective Equipment (PPE), enhanced disinfection and sanitisation protocols at our hotels, as well as adjustments to work practices that enforce social distancing guidelines and measures that ensure general good hygiene”.
During the quarter, the company’s digital platform, the Gateway Stream Web and Mobile Application was named the overall winner in the innovation and technology category in a quoted companies’ survey.
RTG remains optimistic about prospects into the future putting a lot of focus on domestic tourism activity in the remainder of the year.
“The group will be driving holiday packages around the country in order to enable residents to get outdoors and experience their country.”
In recognition of the long cycle nature of the international bookings, RTG says it continues to be actively engaged with regional and international tour operator partners and representatives in filling the long pipeline.
Africa remains amongst the least affected parts of the world by the pandemic and the group will for the next 18 months focus on emerging opportunities on the continent.
This strategy will be boosted by the resuscitation of regional airlines such as Airlink which has partnered Fly Emirates to provide air services to 20 destinations in Africa.
To capitalise on this development, RTG will drive local and regional holiday packages into the Victoria Falls region.
The group is expanding the scope of the Gateway Stream platform with the launch of Gateway Stream Music in December 2020 which will further enhance the Group’s revenue generation efforts.