THE local tourism industry has been reeling over the past year due to the cholera outbreak and the bad publicity which followed the violence after the March 2008 presidential elections.
Apart from the cholera outbreak and political environment, Rainbow Tourism Group (RTG) believe their operations could have been “much better” had it not been for high inflation and price monitoring.
“The operating environment for the year ended December 2008 was extremely challenging. Inflation continued to sky rocket,” said RTG chairman Ibbo Mandaza.
“The National Incomes and Pricing Commission (NIPC) regulated and monitored prices of products and services in the hospitality industry throughout the year, with varying impacts on the group’s performance,” he said.
RTG reported their financial results in the local currency; however they do not give a clear picture to shareholders and investors on how the company performed taking into considering the rate the dollar was losing value against major currencies and the revaluations of the local currency.
“These depressed occupancies were largely due to low conferencing business, depressed disposable incomes and cancellations as a result of travel warnings,” said Mandaza.
According to the Zimbabwe Tourism Authority a total of 17 conferences which were to bring about 1 700 delegates to the country were cancelled last year alone. These included the Common Market for Eastern and Southern Africa (Comesa).
- Chamisa under fire over US$120K donation
- Mavhunga puts DeMbare into Chibuku quarterfinals
- Pension funds bet on Cabora Bassa oilfields
- Councils defy govt fire tender directive
Keep Reading
“The sales mix was 78% domestic and 22% foreign, compared with 76% and 24% respectively in the prior year. Price controls resulted in erratic supplies of strategic hotel products and tight stock levels at most operational units. This had an undesirable effect on service delivery,” Mandaza said.
Mandaza said the mismatch between revenues and expenses persisted for the greater part of 2008 as operating costs continued to be pegged to parallel market rates. With the introduction of multiple currencies, RTG and the tourism industry is poised for a major recovery if they offer competitive prices which will attract both local and foreign tourists.
“The country risk and negative perception associated with the 2008 elections adversely affected volumes at most of the group’s operational units.
While the Global Political Agreement signed by the country’s main political parties in September 2008 ignited hope in many sectors of the economy, there was no discernible impact on business owing to delays in concluding and putting the inclusive government in place,” said Mandaza.
Mandaza said despite the stumbling bloc during the period under review, going forward, prudent procurement strategies had been put in place to ensure uninterrupted business at all the group’s properties.
The deregulation of prices in the fourth quarter and increased foreign currency receipts on local sales is said to have helped the group improve its revenues.
The group continued its expansion into Sub Saharan Africa, focusing in the Sadc region. Two operations were opened in Zambia on a management contract basis.
Negotiations are progressing well with regards to prospects identified in South Africa.
BY PAUL NYAKAZEYA
