BY FIDELITY MHLANGA
RAINBOW Tourism Group (RTG) says it has completed the US$4,4 million facelift of its Rainbow Towers Hotel during the first quarter of 2020 to match international standards.
The refurbishment, which began late last year, comes after the group last year undertook a major revamp of its Bulawayo Rainbow Hotel at a cost of US$2,5 million.
“The group undertook the refurbishment of Rainbow Towers Hotel during the first quarter of 2020. The project was completed within three months and was the hotel’s first full room refurbishment since its construction in 1985,” RTG chairman Arthur Manase said in a statement accompanying the group’s half year results.
“The scope of works included plumbing, electrical, ceiling works, new bathrooms, installation of two brand new guest elevators as well as new in-room furniture and fittings at a total cost of US$4,4 million. The hotel now offers world leading rooms that can compete with other comparable five-star rooms.”
Manase said during the first quarter of the year, the group’s business units were operating optimally notwithstanding the declaration by the World Health Organisation (WHO) of COVID-19 as a global health emergency which had a direct impact on the business through the cancellation and postponement of bookings during the second quarter.
Authorities announced a national lockdown on March 28, 2020, closing all business activities except for essential services. In compliance with this directive, the group proceeded to temporarily close all its hotels with city hotels reopening in early May 2020, albeit with low business volumes due to continued lockdown restrictions.
“The major source of business for those hotels that were opened included quarantine groups, foreign funded non-governmental organisations and government activities. The two Victoria Falls properties remained closed for the rest of the first half due the absence of airlines operating into the region. To ensure the safety and wellbeing of our staff and guests, the group has implemented COVID-19 protocols as guided by WHO and the Ministry of Health and Child Care,” Manase said.
Occupancy for the period under review closed at 25% compared to 43% recorded during the first half of 2019.
The group posted revenue of $230 million, 51% below $470 million posted the same period in 2019. Gross margins for period under review closed at 63% from 74% posted in 2019 attributable to revenue lost during the lockdown period.
It also posted an earnings before interest, tax, depreciation and amortisation margin of 38%, a growth of 19% compared to 32% posted in 2019 mainly as a result of various cost reduction initiatives adopted prior to and during the lockdown period.
Net profit margin for the period closed 9% in 2020 compared to 15% in 2019. The group’s profitability was supported by the increase in fair value of its stock market investment. Profit for the period went down to $49,3 million from $68,7 million.
During the period under review, the group paid the debenture of $16,7 million in full an instrument issued in February 2018 at an interest rate of 6% and tenure of seven years. The early payment of the debenture released the group’s assets which were pledged as security.