RTG becomes innovative to survive

Hotelier Rainbow Tourism Group (RTG) is pushing innovation and new products to grow revenue and market after a ‘difficult’ period in which the company almost collapsed, the chief executive Tendai Madzivanyika has said.

The group reported a 14 percent decline in revenue to $7.6 million in the quarter to March due to a fall in the number of conferences — which traditionally drive revenue for the group — and a loss of $1.3 million for the full-year to December 2014 from a profit of $1.1 million in the prior year after the outbreak of the deadly Ebola disease in West Africa resulted in hotel cancellations.

RTG last week launched an auction online system, where visitors can bid to stay at any of its hotels on a particular date which it says will give it a competitive advantage and improve domestic tourism. Last month, it launched a low cost Rainbow Delights food experience across its hotels while late last year, it entered into ‘virtual’ partnerships with other hotel groups that gives it a presence in areas where it has no properties.

“Our environment as we all know, is extremely difficult, and I think that companies have a choice to make. Its either they accept the environment as it is or they can take the bull by its horns and say ‘we are going to create the future that we desire, a future that we ourselves define,” Madzivanyika said.

“At RTG we think that one way we can achieve this is by innovating as the environment changes and seizing on opportunities. What we are saying is that we are responding to the environment and that the environment has challenged us to say: is the traditional model the right model? Perhaps it may not be the right model, why should hotels be known for beds or people that are coming to you, why not going to where people work and play?”

Madzivanyika said innovation will shape RTG as a mega player in the tourism industry.

“Our auctions facility for example will not be limited to bed and breakfast packages and will include, for example, our sunrise cruises which we launched recently in Victoria Falls. In fact, for the same property we can offer up to 10 different packages. On top of that we are going to include our virtual partners to offer more choice to our customers for the widest experiences in the country.”

While the company hopes to grow the domestic market, it expects foreign receipts to account for around 30 percent of earnings going forward, a mix Madzivanyika said he was comfortable with. He said foreign arrivals which stood at 24 percent of revenues in 2013, now account for 29 percent of the top line, but said further growth could expose the business to external risks.

“It’s not that we do not want our foreign receipts to grow, but  any higher would leave us susceptible to external shocks and put us in real peril,” he said.

The company has no plans to expand operations outside Zimbabwe, apart from its Mozambique operation, with Madzivanyika saying the company would like to stabilise local operations first.

“Two years ago we were almost collapsing and we have come a long way from that. For now we would like to consolidate our local operations and grow our market for maybe another two years before we look outside. By then we also hope to have developed the skills base that we can export,” he said.-The Source

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