Rainbow Tourism Group (RTG), a leading hospitality company in Zimbabwe, has reported a 13% increase in revenue to $50.3 million for the year 2025. The growth was achieved despite the withdrawal of USAID funding, which resulted in an estimated $3 million in foregone potential revenue. The company attributed the loss of donor-funded business to the United States government's decision to cut and terminate thousands of foreign assistance programs, including projects in Zimbabwe.
To mitigate the impact of the funding withdrawal, RTG shifted its focus towards foreign-currency earnings and replaced donor-linked business with commercial, regional, and corporate demand. This strategic move contributed to a 28% increase in foreign-currency revenue to $24.1 million, which accounted for 48% of total group revenue, up from 43% in 2024. The company's ability to adapt to the changing business environment helped it navigate the challenges posed by the USAID funding withdrawal.
RTG's conferencing revenue increased by 6% year-on-year as it sought to replace donor-funded business. The company's South African office helped open access to additional regional markets, further diversifying its revenue streams. The Bulawayo Rainbow Hotel generated $1.13 million during the 2025 Zimbabwe International Trade Fair, exceeding its performance in the previous year despite lower government expenditure.
Despite the positive revenue growth, RTG's profitability was affected by expansion-related costs, including acquisition interest, additional depreciation, and legal and advisory costs associated with its Cape Town and Montclair transactions. Earnings before interest, tax, depreciation, and amortization declined by 20% to $7.8 million from $9.7 million. Profit before tax fell to $4.2 million from $7.9 million, while profit for the year declined to $3.3 million from $5.4 million.
However, RTG's adjusted profit before tax, excluding once-off costs, was $5.4 million, representing a 54% increase from the previous year. This provides an indication of the underlying performance of the business. The company's group chief executive, Tendai Madziwanyika, noted that the group had increased revenue despite continued macroeconomic pressures, while its gross profit margin improved by four percentage points to 74%.
RTG invested $15.5 million in capital expenditure during the year, including $13.4 million on three acquisitions and $2.1 million on refurbishments. The acquisitions comprised Montclair Resort and Conference in Nyanga, Batoka Safaris, and MSK House in Cape Town. The expansion increased RTG's total assets by 28% to $82.7 million from $64.5 million, while gearing rose from 8% to 24% after debt facilities were used to finance the Montclair and Cape Town acquisitions.
Looking ahead, RTG expects its 2026 performance to benefit from increased domestic, regional, and international tourism, conferencing activity, and contributions from businesses acquired during 2025. The company maintained dividend payments, with the board declaring a second and final dividend of $1.7 million, comprising $650,000 in foreign currency and $1.05 million in local currency. Together with the $1.1 million interim dividend declared in September 2025, total dividends for the year amounted to $2.8 million.
Key points
- Rainbow Tourism Group reported a 13% increase in revenue to $50.3 million despite losing $3 million in potential revenue due to USAID funding withdrawal.
- The company shifted its focus towards foreign-currency earnings and replaced donor-linked business with commercial, regional, and corporate demand.
- RTG's adjusted profit before tax, excluding once-off costs, was $5.4 million, representing a 54% increase from the previous year.
