ZIMBABWE’S largest hospitality group by market capitalisation, Rainbow Tourism Group (RTG) has shut down its Beitbridge hotel due to recurrent losses that have weighed down on the group, the company announced on Wednesday.
The US$45 million hotel which was opened in 2014 was scheduled to be commissioned in 2010 after group anticipated spill-over benefits of the FIFA World Cup in neighbouring South Africa.
“This business decision was reached following consultaltion. Market factors characterised by depressed occupancies, low margins as well as high operating costs were major contributing factors in exiting Beitbridge,” the group said in a statement.
“Operational costs of the hotel were no longer sustainable. Since opening in January 2014, the hotel has incurred losses amounting to more than US$2 million. The latest projections show a declining market demand and rate yield with strong indications that the hotel will continue to make losses into the foreseeable future. This poor performance has continued to weigh down the overall performance of the group.”
The group said workers that were affected by the closure of the Beitbridge Hotel have been offered alternative employment within the group. RTG operates six hotels in the country.
Last year, the Zimbabwe Independent reported that the National Social Security Authority (Nssa)—owners of the hotel–had by June lost more than half of its nearly US$700 million — about US$350 million — total investment portfolio due to market volatility, bad deals and mismanagement of public funds.
Nssa’s investment portfolio includes money market, investment in property, short and long term investments in associates and subsidiaries as well as land inventory and deals referred to as “other investments”.-Staff Writer