Advisory sees hefty spinoffs in RTG deal

Martin Smura board chairman and president for GMH, said at the signing ceremony in Cape Town last week that the benefits of the transaction were broad.

ONE of Zimbabwe’s leading advisory firms said this week Rainbow Tourism Group (RTG)’s deal with a Swiss hotelier would bolster its financial performance.

Under the deal, which was announced during the World Travel Market in Cape Town, South Africa last week, RTG and Grand Metropolitan Hotels BV agreed to form joint ventures to exploit opportunities in the tourism sector.

In an analysis of the deal shared with investors this week, Equity Exis said RTG will ride on GMH’s international exposure.

The Swiss firm presides over a string of exclusive hospitality gems worldwide, leveraging on its 200 million Euro asset base.

GMH is a management firm overseeing about 79 hotels in some of the world’s biggest markets.

“This partnership will likely improve RTG’s financial performance due to synergistic benefits emanating from GMH’s wider international experience and expertise,” Equity Axis noted.

“The first element is that the partnership will form a Zimbabwean joint venture entity which will identify and pursue new hotel opportunities in the country.”

Statistics released by Equity indicated that by the end of this year, the domestic hotels market will generate up to US$83,23 million in revenues.

It said revenues were expected to rise annually at a rate of 5,65%, and are seen hitting US$103,70 million by 2028.

It said users in the hotel market were forecast to rise to 1,05 million during the period.

“In 2024, the user penetration rate is projected to be 4,9%, which is expected to rise to 5,7% by 2028. The average revenue per user is projected to be US$100. Moreover, it is expected that by 2028, 72% of the total revenue in the Zimbabwean hotel market will be generated through online sales. All things being equal, these statistics suggest that there is still scope for growth in the local hotel market there-by favouring this strategic partnership,” Equity Axis said.

Martin Smura board chairman and president for GMH, said at the signing ceremony in Cape Town last week that the benefits of the transaction were broad.

“Through joint marketing efforts and cross-promotion, the partnership will help to showcase African destinations to a global audience,” he said. “GMH’s international network and marketing capabilities will support RTG in promoting African countries as attractive tourist and business travel destinations, further driving growth and attracting investment,” Martin said.

“This partnership will not only benefit RTG and GMH but will create job opportunities across various sectors, including accommodation, food and beverage, tourism services, and more.

“Africa has the fastest growing population, which is projected to reach 2,5 billion by 2050, leading to increased domestic tourism and travel spending. This long-term growth potential can make hotel investments attractive for those seeking sustained returns over time. We see a real opportunity for GMH.”

Rainbow Tourism Group (RTG) World Travel Market Martin Smura Provided by SyndiGate Media Inc. (Syndigate.info).