Rainbow Tourism Group slips to a $1.9 million loss

Hotelier Rainbow Tourism Group slipped into the red in the six months to June with a $1.9 million loss from a profit of $139 000 previously as arrivals remained depressed, the company said on Friday.

The group’s critical indicators were all in the negative; revenue also declined by eight percent to $12.4 million from $13.5 million achieved during the same period last year after a fallow first four months of the year while occupancies fell five percent to 41 percent in the half-year.

Revenue per Available Room (RevPAR) decreased by six percent to $30 from $32 recorded last year and earnings before interest, tax, depreciation and amortisation (EBIDTA) margin stood at  $500 000 compared to $1.5 million, or at four percent from 11 percent.

Gearing was higher at 58 percent from 56 percent as of December last year.

“The revenue performance was negatively impacted by low conferencing activity in the first four months of 2015. The decrease in foreign business which is mainly driven from South Africa was due to the weakening of the Rand rendering Zimbabwe an expensive destination,” the company said.

The group will continue to pursue a pricing model that aims to promote domestic tourism in order to boost activity in all its hotels, it added.

In the period under review, it launched a series of promotions including new weekender rates, RTG Online Auctions and the Rainbow Delights menu to “minimise the impact of liquidity challenges in the domestic market”.

“The total debt decreased to $21.1 million from $22.2 million as at December 31, 2014 and the cost of debt reduced to 10 percent from 11 percent recorded during the same period last year. Gearing increased to 58 percent as at June 30, 2015 from 56 percent as at December 31, 2014,” the company said.

RTG it did not declare an interim dividend.-The Source

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