Zimpapers Logo

Hospitality concern Rainbow Tourism Group said yesterday it will next year save up to $1 million in salary payouts after it retrenched about 70 workers this year. RTG chief executive officer Tendai Madziwanyika said the group, which recorded a 32 percent rise in net profit of $139 000 for the half year ended June this year, had paid out over $800 000 in packages to the 68 workers retrenched this year.

Mr Madziwanyika said the group initially retrenched eight members of staff and paid out over $130 000 followed by a further 60 to who it forked out $700 000.
“We will save over a million dollars in 2015 after the retrenchments,” he said.
He said most of the staff retrenched was from the head office in Harare.

“We have in excess of 80 staff in the head office kitchen, yet the whole of A’ Zambezi (its hotel in Victoria Falls) employs about 60 people,” he said.
Mr Madziwanyika said retrenchment was one of the cost cutting measures the group had employed in the past two years to reduce high overheads.

“The costs reduction strategies commenced in 2012 and in the half year to June we achieved a 13 percent reduction,” he said.
Last year the hotel group, estimated to be employing over 1 000, shelved the retrenchment exercise mooted over two years ago, after it felt that it did not have the resources to pursue it.
Mr Madziwanyika said RTG, which recorded a 2 percent increase in revenue to $13,5 million in the period, had effectively cut its utility bills through use of borehole water and use of alternative energy for its kitchens, as well as using energy saving bulbs.

The hotelier has adopted three promotional strategies which have assisted in boosting revenues, namely the Stay Now Pay Later, RTG Virtual and RTG Mobile.
In the period, revenue from promotions had jumped to $3,3 million from $3 million last year.

Arrivals at the group hotels were up 17 percent driven mainly by tourists from Africa, Asia and Europe.
The group anticipates that arrivals will close the year at 51 percent, up from 47 percent recorded in 2013 while its revenue per available room is expected to remain unchanged at $42 at year end.

Mr Madziwanyika said the business would continue to be “creative and innovative” to remain competitive in the tough economic environment. – New Ziana.