BY TATIRA ZWINOIRA
Hotelier, Rainbow Tourism Group (RTG) is working on securing management contracts for hotels in the region as part of measures to augment the company’s capacity to generate foreign currency.
RTG chief executive officer Tendai Madziwanyika told NewsDay that the company was targeting northwards of US$3 million in net revenue from this specialised unit of the business.
He said in terms of the hotel management partnerships, RTG will be looking for deals where they can earn between 10% and 50% in commissions by representing different hotels with immediate targets in South Africa, Botswana and Namibia.
In 2018, RTG’s foreign business grew 24% to US$11 million due to growth in occupancies, food and beverages from a 2017 comparative of US$8,9 million.
“Foreign revenues are at about 32% of total revenues. You can see how we are edging it up. We would like to continue doing that,” Madziwanyika said.
He added that the group had also set up a new touring subsidiary Exotic Travel International (ETI), based in the United States.
“They (ETI, Gateway Stream and hotel partnership schemes) are all still very young and we do not want to put too much burden on those businesses, but we were talking about US$3 million from all the three businesses. So this will be from your ETI, Gateway Stream and virtual (hotel partnership schemes). Imagine, by growing from US$11 million in foreign business from 2018 you are looking at going to about US$14 million for this year.”
Total revenue increased by 27% to US$34,3 million in the period under review from a 2017 comparative of US$27 million.
The occupancy rate across RTG’s hotels was 61% with the average daily rate growing 28% to US$87.
“The company delivered growth in rooms, food and beverages streams compared to full year 2017. The performance is a solid improvement as evidenced by increased occupancies which grew by 7%,” RTG chairperson Sijabuliso Biyam said.
“City hotels accounted for much of the growth in 2018, posting a growth of 34% from US$20 million in 2017 to US$26,8 million in 2018.”
Operating expenses grew 19,11% to US$17,17 million in 2018 due largely to refurbishments of RTG’s hotels from a 2017 comparative of US$14,42 million.
Basic earnings per share grew to 0,204 US cents in the period under review form a 2017 comparative of 0,006.
Total assets grew to a near US$56,8 million for the 2018 period due to an increase in property and equipment from US$45,7 million in 2017.