HOTEL group Rainbow Tourism Group (RTG) sees sustained revenue growth in 2014 after a 7% growth in receipts in the first four months of the year to April in the same period last year, the company said.
In a trading update at the company’s annual general meeting Wednesday, CEO Tendai Madziwanyika said revenues grew by 7% to US$8,7 million from US$8,1 million in the corresponding period last year, with growth expected to be sustained throughout the financial year.
“Traditionally, 60% of our revenues are in the second half of the year,” he said.
Madziwanyika said Zimbabwe operations revenues increased to US$8,2 million from US$7,7 million, which was a 7% increase while foreign revenue grew by 13%.
“This achievement was due to improved performance by the resort hotels and the rainbow towers hotel and conference centre,” he said.
Madziwanyika said Bulawayo Rainbow Hotel performed well during the 2014 Zimbabwe International Trade Fair (ZITF) period, achieving a 24% increase in revenues as compared to ZITF 2014.
“We are targeting better numbers for next year’s ZITF,” he added.
Rooms sold over the period under review grew by 16%, resulting in an occupancy growth of 16% from 38% in the first quarter of 2013 to 44% in the first quarter of 2014.
Madziwanyika said the group adopted several low season promotions to boost revenue.
He said e-commerce revenues for the period increased by 19% over the prior year.
Madziwanyika said contributions from the South African office continued to increase significantly, adding the results are evident through enhanced revenues for the Victoria Falls properties.
The group sees more growth in the second quarter after revenue contributions grew by 51% above prior year.
In the period under review, the group achieved a first quarter market share of 28%, which was 22% increase from the 23% achieved in the same period in 2013.
Madziwanyika said the company’s cost reduction exercise would continue with a retrenchment exercise currently underway and expected to be completed soon.
“Benefits of cost reduction are now coming through the business indices in that despite the 7% revenue growth reported earlier, operating and administration costs came down for the same period,” he said.
Year to date, the group’s cost of sales remained within the budgeted 10% level of turnover with further cost reduction on procured services and goods measured against prior year’s consumption at 13%, a further saving to the 16% reduction realised prior year.
Going forward, the group said it remains focused on judicious management of its debt obligations. The business continues to execute its long term balance sheet management plan, which focuses on reduced levels of gearing and increased self funding.
Refurbishments are now being internally funded.
In the previous full year results for the period ended 31 December 2013, RTG reported a US$1,1 million after tax profit, recovering from a US$5,9 million loss in the previous year after a cost cutting initiative that resulted in introduction of centralised procurement.
Revenues grew by 6% in 2013 to US429, 7 million.