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TOURIST arrivals from Asian source markets were 51 percent up for the Rainbow Tourism Group (RTG) as foreign business continues to stake a significant share of the company’s business. According to RTG, foreign business rose from 22 percent in the first half of last year to 28 percent this year. RTG group CEO Tendai Madziwanyika said yesterday that the Asia source market has reflected the highest growth in the first quarter of this year.

“On a national level, arrivals were down 1 percent, but in RTG our growth was 16 percent, the highest growth was from Asia and really, it’s mainly Japan and China, they are leading the growth out of Asia,” he said.

In terms of the company’s first half results, Madziwanyika said a number of strategies that were implemented during the period under review were beginning to pay off, with the group showing “strong business fundamentals”.

During the period, RTG posted a profit after tax of $139,000, which was a 32 percent increase from the $105,000 achieved during the same period last year.
Revenue for the period increased by 2 percent to $13,5 million from $13,2 million.

Occupancies for the group’s Zimbabwe hotels, excluding the newly opened Rainbow Beitbridge Hotel increased by 8 percent from 48 percent to 52 percent.
Despite the new hotel posting an earnings before interest and tax, depreciation and amortisation (EBITDA) loss of $350,000, Madziwanyika said its future prospects were bright.

“Beitbridge is helping us spread our geographical reach and to take advantage of activities around Beitbridge area,” he said.
In terms of its e-commerce business, there was a 58 percent increase in that form of revenue from $241,000 in the first half of last year to $380,000 in the half year just ended.

Foreign revenue contribution for the A’Zambezi River Lodge increased by 17 percent from 41 percent to 48 percent.
During the period, the group achieved a $2,5 million growth in enduring revenues from new business and replaced non-recurring business in the comparative period.
The group’s EBITDA was $1,5 million in the first half of this year, compared to $1,6 million in the corresponding period.

Management said the drop in EBITDA was mainly due to the newly opened Rainbow Beitbridge Hotel, which posted an EBITDA loss of $350,000 as a result of high start-up costs and low revenues.

RTG also embarked on a staff retrenchment exercise with retrenchment costs amounting to $130,000, which the group expects to be accounted for in the current reporting period.

The company’s total debt reduced to $23,5 million in the period under review from $23,9 million as at the end of last year.
The effective cost of debt remained at 11 percent since the beginning of this year.- BH24.