Zimbabwean hotelier in multi-million capex
ZIMBABWE Stock Exchange-listed hotelier, Rainbow Tourism Group (RTG), says it is now pursuing an asset-light growth model, after spending $5,7 million in product upgrades in the first half of 2019.
The hotel group’s Chief Executive, Tendai Madziwanyika, said the firm – which recorded a 170 percent growth in revenue in the first six months of 2019 despite business challenges – had funded its capital expenditure from internally generated cash flows.
“In the first quarter of 2019, the company completed the refurbishment of Bulawayo Rainbow Hotel. The scope of works included the complete overhaul of the water reticulation system, upgrade of all guest in-room bathrooms, reduction in the noise factor by implementing double glazed windows and upgrade of in-room soft furnishings.
“The refurbishment also included the installation of two brand-new guest elevators,” Madziwanyika said.
Preliminary works on the rooms upgrade for the Rainbow Towers Hotel & Conference are currently underway, paving way for a comprehensive refurbishment, according to the RTG boss.
The company has also capitalised Heritage Expeditions Africa, its local tour operations subsidiary.
Meanwhile, RTG still managed to record a profit for the half year in spite of business disruption arising from the protests in January 2019 as well as the temporary closure of the Bulawayo hotel.
Profit before tax for the period under review closed at $6,7 million up 16-fold from $416 000 recorded in 2018. The company posted a profit after tax of $5,4 million, which is 25 times growth from $210 000.
RTG generated foreign currency revenues of US$4.8 million, up nine percent from US$4.4 million recorded during the same period in 2018.