RTG mum on retrenchment plan

HARARE - Listed hotelier Rainbow Tourism Group (RTG) has refused to disclose details of its planned retrenchment exercise saying they are yet to finalise the process.

The group, which has embarked on a voluntary retrenchment programme as part of efforts to streamline operations and contain costs, could not disclose how many workers would be laid off and at what cost.

It employs more than 1 000 workers.

“I cannot tell you the numbers right now. The whole process has been confidential. We have not yet gone back to the people who have applied (for voluntary retrenchment). I think it would be amiss for me to give real numbers,” RTG’s chief executive Tendai Madziwanyika said at the group’s annual general meeting on Wednesday.

“As you know, our half year numbers are going to come out just know...we will be able to disclose those numbers,” he said, adding that the response has so far been positive and they anticipated that the group will achieve its intended retrenchment numbers.

In the four months to April 2014, Madzivanyika said the group managed to contain expenses and implement further cost reduction strategies.

“Cost of sales remain within the expected level of ten percent of turnover. So far cost reduction on procured services and goods measured against prior year’s consumption is 13 percent, which is a further saving to the 16 percent reduction realised in prior year,” he said.

He noted that in the face of a depressed economic environment in which revenue streams were also down, they believed “cost management is where the game will be won and lost in the foreseeable future”.

Meanwhile, the group’s revenue for the period grew by seven percent to $8,7 million from $8,1 million for the corresponding period last year.

“This resulted in an occupancy growth of 16 percent from 38 percent in the first quarter of 2013 to 44 percent in the first quarter of 2014,” said Madziwanyika.

The hotelier’s local operations’ revenue increased by seven percent to $8,2 million from $7,7 million in prior period on the back of improved performance by resort hotels and the group’s flagship Rainbow Towers and Conference Centre.

A’Zambezi River Lodge recorded revenue growth of 25 percent over corresponding period last year whilst the Rainbow Towers registered a ten percent growth in turnover.

Revenue contribution from the hotelier’s South African office grew by 51 percent while e-commerce revenues for the period increased by 19 percent over prior year.

International arrivals into RTG grew by 13 percent over the same period last year.

Foreign business grew by nine percent above prior year with domestic revenues up by seven percent.

In regional hotels, performance was subdued particularly in Mozambique and the group has since adopted revenue generation strategies to ramp up the business.

Going forward, the group hopes to focus on improving productivity and capacity utilisation as it seeks to grow shareholder value and improve returns in the near term. — Business Live

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