Rainbow Tourism Group (RTG) has reported a strong revenue rebound for the year ended 31 December 2025, underscoring how sustained top-line growth helped the hospitality group navigate Zimbabwe’s persistent liquidity constraints.
The hotelier posted a 13 percent increase in revenue to US$50.3 million during the period under review, up from US$44.4 million recorded prior year, driven by improved occupancy, higher room rates and a surge in foreign currency earnings.
This performance came despite what the company described as “persistent market liquidity challenges” and reduced business from non-governmental organisations following cuts in donor funding.
RTG’s ability to grow revenue in a constrained liquidity environment reflects a strategic shift toward hard-currency income streams.
Foreign currency earnings rose 28 percent to US$24.1 million, supported by increased international tourist arrivals and conferencing activity, particularly in Victoria Falls.
The revenue increase translated into stable operating cash generation, with cash made from operations rising slightly to US$8.08 million.
Management noted this steady inflow has been critical in supporting liquidity, allowing the group to fund operations, service debt and maintain dividend payouts, even as broader market cash shortages persist.
It said that revenue growth, coupled with improved operational efficiencies, helped cushion the business from liquidity pressures that continue to affect Zimbabwe’s economy.
The group also benefited from a diversified portfolio spanning hotels, conferencing and tour operations, which broadened income sources and reduced reliance on any single segment.
However, the stronger revenue performance did not fully translate into higher profitability.
EBITDA declined 20 percent to US$7.9 million, largely due to a US$1.6 million spent on acquisition-related costs tied to the group’s expansion strategy.
Profit after tax fell 39 percent to US$3.26 million, highlighting short-term margin pressure, despite revenue gains.
RTG undertook significant capital investments during the year, including acquisitions such as Montclair Hotel and Casino, MSK House in Cape Town and Batoka Safaris.
These investments contributed to a 28 percent increase in total assets to US$82.7 million and are expected to enhance future revenue generation.
While these expansion efforts increased debt levels and investing cash outflows, management indicated that the group’s liquidity position remains manageable, supported by ongoing revenue growth and disciplined capital management.
Looking ahead, RTG expects its growing foreign currency base, new business units and improving tourism demand to further strengthen cash flows and liquidity resilience.
The group said it remains focused on leveraging revenue growth to sustain operations and fund expansion in a challenging macroeconomic environment. – TML