Business / Companies
RTG closes Beitbridge Hotel
02 Jun 2016 at 06:31hrs | Views
THE Rainbow Tourism Group (RTG), one of the country's leading hospitality groups, on Tuesday closed its Rainbow Beitbridge Hotel, citing prolonged loss-making since its inception.
The project, which was handed over to RTG after being constructed and funded by NSSA as part government's national economic development programme, had been functional since January 15, 2014. Since then, the hotel has incurred losses amounting to more than $2 million.
Yesterday, RTG's board of directors said the $22 million state of the art hotel's operational costs had become untenable, forcing them to shut it down.
"Rainbow Tourism Group has closed the Rainbow Beitbridge Hotel (RBH) effective May 31, 2016. The business decision was reached following much consultation.
"Market factors characterised by depressed occupancies, low margins as well as high operating costs were the major contributing factors in exiting Beitbridge," RTG said in a statement.
"Operational costs of the hotel were no longer sustainable. Since opening in January 2014, the hotel has incurred losses amounting to more than $2 million.
"The latest projections show a declining market demand and rate yield with strong indications that the hotel will continue to make losses into the foreseeable future. This poor performance has continued to weigh down the overall performance of the group."
The group said workers that were affected by the closure of the Beitbridge hotel have been offered alternative employment within the group. RTG also owns Victoria Falls hotels — Rainbow and A'Zambezi River Lodge as well as the New Ambassador Hotel and Rainbow Towers in Harare. It also runs Bulawayo Rainbow and Kadoma Hotel and Conference Centre.
Rainbow Beitbridge is the second hotel to fold in the border town after African Sun Limited closed its Holiday Inn Beitbridge Express Hotel in February, also citing protracted loss-making by the facility.
NSSA's investment portfolio includes money market, investment in property, short and long term investments in associates and subsidiaries as well as land inventory and deals referred to as "other investments". The latest addition to the NSSA stable is the National Building Society which was launched in Harare and Bulawayo last month.
The project, which was handed over to RTG after being constructed and funded by NSSA as part government's national economic development programme, had been functional since January 15, 2014. Since then, the hotel has incurred losses amounting to more than $2 million.
Yesterday, RTG's board of directors said the $22 million state of the art hotel's operational costs had become untenable, forcing them to shut it down.
"Rainbow Tourism Group has closed the Rainbow Beitbridge Hotel (RBH) effective May 31, 2016. The business decision was reached following much consultation.
"Market factors characterised by depressed occupancies, low margins as well as high operating costs were the major contributing factors in exiting Beitbridge," RTG said in a statement.
"Operational costs of the hotel were no longer sustainable. Since opening in January 2014, the hotel has incurred losses amounting to more than $2 million.
"The latest projections show a declining market demand and rate yield with strong indications that the hotel will continue to make losses into the foreseeable future. This poor performance has continued to weigh down the overall performance of the group."
The group said workers that were affected by the closure of the Beitbridge hotel have been offered alternative employment within the group. RTG also owns Victoria Falls hotels — Rainbow and A'Zambezi River Lodge as well as the New Ambassador Hotel and Rainbow Towers in Harare. It also runs Bulawayo Rainbow and Kadoma Hotel and Conference Centre.
Rainbow Beitbridge is the second hotel to fold in the border town after African Sun Limited closed its Holiday Inn Beitbridge Express Hotel in February, also citing protracted loss-making by the facility.
NSSA's investment portfolio includes money market, investment in property, short and long term investments in associates and subsidiaries as well as land inventory and deals referred to as "other investments". The latest addition to the NSSA stable is the National Building Society which was launched in Harare and Bulawayo last month.
Source - chronicle
