Bulls n Bears:::: On A Date with On a Date with RTG

Thu Nov 3 15:57:07 CAT 2022

Start doing big things, spree USD 10 today and invest in a place that can host 5,000 people indoors in Harare👇

Welcome to On a Date with a listed company on the Zimbabwe Stock Exchange (ZSE)

THREAD: On a Date with Rainbow Tourism Group Limited (RTG)

#1. History, 

1953, Hotel Victoria is built which will be later renamed to Bulawayo Sun and Bulawayo Rainbow Hotel.

1955, The Ambassador Hotel is built with the aim to host government officials, foreign diplomats. 

1972, A'Zambezi River Lodge built.

1974, A 44 room Rainbow Hotel is constructed by Gardini & Sons in Victoria Falls. 

1983, Government of Zimbabwe (GoZ) commissions the construction of a 5⭐ hotel and conference center in Harare.

1985, The GoZ project is completed, Sheraton Hotel is opened.

Sheraton Hotel is handed over to an international management consultant to expertly run the hotel under a known brand Sheraton.

The conference centre is named Harare International Conference Centre (HICC) operated by the Ministry of Environment and Tourism

1986, Zimbabwe Tourist Development Corporation (ZTDC) takes over, Victoria Falls Rainbow Hotel,  Ambassador Hotel,  A'Zambezi River Lodge

The ZTDC is a parastatal which had been formed 2 years early with a mandate to develop the tourism sector.

1989, ZTDC Act is amended to create a commercial arm which becomes the Zimbabwe Tourism Investment Company (ZTIC) a year later

1992, Commercial assets are transferred to ZTIC from ZTDC and Ministry of Environment & Tourism. 2 years later ZTIC rename to RTG

1995, RTG acquires Kadoma Ranch and Bulawayo Sun Hotel which it acquires after 2 years changing its name to Bulawayo Rainbow Hotel

1999, listing of RTG on the ZSE which is followed by the non renewal of a management contract with Starwood Hotels and Resorts

Starwood Hotels and Resorts had bought ITT Sheraton 7 years earlier which owned the Sheraton brand.

2006, RTG merges the Sheraton Hotel and HICC renaming it Rainbow Towers Hotel and Conference Centre the  management is localized

2013, USD14.5 million is raised through a mix of debt and equity to recapitalize the business and restructure short term debts.

2018, RTG establish a tour operation, Heritage Expeditions  Africa and an e-commerce platform, Gateway Stream

#2. Operations,

RTG is in the tourism and hospitality sector. It has 3 distinct operations which are complementary

Hotel Operations,

The central unit is made of,

*	6 hotels of different stars

*	+876 rooms 

*	+7440 conference capacity

3 hotels are leased with the major landlord being GoZ.

The hotels are located in Harare, Bulawayo, Kadoma and Victoria Falls.

Tour Operations,

A specialist in providing packages that target those seeking,

*	Adventure, Full day team building activities 

*	Wildlife Safari, tours to Hwange National Park

*	Historical & Cultural Experiences

across Southern and Eastern Africa

E-commerce operations

Gateway Stream is a one stop online marketplace that offers a diverse range of products and experience.

Through the platform it has managed to become a leading provider of accommodation rooms in 26 African countries.

#3. Competitors,

RTG is leading player in the tourism, hospitality and e-commerce sector 

However in its current markets it has a number of key rivals including,

• African Sun, owner of 6 hotels in Harare, Bulawayo, Victoria 

• Pamushana Africa Group

Masawara, owner of Cresta Hotels (Cresta Churchill, Jameson, Sprayview and Oasis

EcoCash Holdings, owner of an online marketplace Ownai which sells a number of items.

Nesbitt Hospitality Group which owns N1 hotels in Harare, Bulawayo and Victoria Falls

#4. Share Price

ZWL8.12 per share as at 03 Nov, 2022.

ZWL7.80 per share on the 4th of January 2022.

Up 4.10% YTD vs ZSE ALSI at 40.33%

2,495,495,543,100 issued shares, ZWL 20.263bn market cap, US$32.5m @RBZ Interbank 

#5. Shareholding,

91.60% of RTG is controlled by National Social Security Authority (NSSA) 

3.34% of RTG is in GoZ hands through the Ministry of Environment and Tourism

The GoZ built RTG but upon its listing gave up significant stake in the business.

#6. Management,

Tendai Madziwanyika - CEO

A superb business executive who holds a Masters in Business Administration (MBA)

Prior to joining RTG was a Managing Director at African Sun a listed hotelier.

Achievements,

*	Concluding the recapitalization plan

*	Turning around the business resulting in USD 1 million profit within a year from USD 6 million loss the previous year.

*	Diversification of RTG from a hotelier focused business to an integrated experiences business.

*	Investing in core business

#7. Pitch,

Projected increase in international tourist arrivals as Covid-19 subsides globally. 

48% hotel occupancy from 24% recorded in the previous  period, increases expected.

Domestic tourism is gaining traction especially on packaged tours.

Current CEO has skin in the business through his 0.04% stake.

Access to +60,000 accommodation rooms across Africa.

Complementary business units which can support a customer along their experience journey.

Each week will be on a DATE with a company listed on the ZSE with Martin Mataga an Investment Democrat. Twitter @MartinMataga. The purpose of this thread is to assist investors to have a minimum appreciation of listed firms. Bulls n Bears has made reasonable effort to validate and update the information before circulation but the onus is on the investor consult their financial advisor. 

Disclaimer: Do not misconstrue this thread as investment advice. DATE companies before you buy their shares. For comments and questions reply to  <mailto:bulls at bullszimbabwe.com> bulls at bullszimbabwe.com

Invest Wisely!

Bulls n Bears 

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