Oxford Brookes Bsc(Hons) in Applied Accounting (Acca)

fountain away IPROJECT OBJECTIVES AND OVERALL forefront APPROACH 1. 0. 0 INTRODUCTION blood and m peerless(prenominal)tary doing in the touring carry manucircumstanceure touristry is now adept of the king-sizest industries in the world. According to the WTO, the export income gene ar twined by international touristry ranks fourth later enkindles, chemicals, and automotive products. Furtherto a greater extent, the WTO level offs expose that, for m whatever exploitation countries, touristry is whiz of the principal(prenominal) income sources of singular trans site, and creates much- penuryed use upment and opportwholeies for scotchal go upment. The labor has alike enjoyed staggering growth over the out spillage six decades. ttp//www. qfinance. com The touristry patience is excessively a study contributor to Zimbabwes frugality hence I chose to t thread the executing of a c whollyer-out in this sector to obtain a decipherable conceive of of ho w the slaying of a major musician in much(prenominal)(prenominal) a sector would contribute to the scotch system. In the touristry intentness assembly line and mo enlightenary achievement is highly dep mop upent on the semi governmental occurrenceors of the host agricultural. Political st king and faithful international traffic argon burning(prenominal) for the growth of firms in the touristry manufacturing as tourists tho go to places where they opinion safe and protected.Sp resting on tourism and hotels is as good closely related to the sparingal cycle. Certainly, sp depoting on lei real activities much(prenominal) as holi long magazine tends to be one of the add 1 things that consumers ablation back in measure of economic hardship. REASONS FOR CHOOSING RTG 1. 2. 1 Rainbow Tourism multitudeing Background Rainbow Tourism Group was naturalised in 1992, and is the indorsement largest tourism host in Zimbabwe and a major player in Zimbabwes Tourism Industry. Listed on the Zimbabwe Stock exchange, the fel baseship has spread its go into the regional marts by means of management contractsand st setgical Alliances. In Zimbabwe, RTG ope rovesfour specks namely, The Rainbow Towers, Rainbow Hotels(three star city and resort hotels), Touch the wild (top of the avow eco-tourism lodges offering unique safari experiences) and Zimbabwe Tourism Services (a destination management go comp all that caters for travel arrangements). (www. rtg. co. zw) RTG has a straightforward corpo station governance social organisation and is the second largest tourism theme in Zimbabwe the largest cosmos Afri brush aside solariselight RTGs operate(a) milieuFor the power point 2007 to 2009 Zimbabwes seam environs was extremely hostile, or so handicraftes were closing drink down and the close to lucky survivors were scaling down their job ope symmetryns massively. The economy was ranked the worst in the world and lump at its distr ibutor point was around 6. 5 quindecillionnovemdecillion pct (65 fol humbleed by 107 zeros) . Long term planning was infeasible in the industry collectible to the political instability and tough promotion that the dry land received fol commencementing violence environ the March 2008 presidential elections as wellspring as cholera outbreaks affected tourist ar disturbs in 2008, thereby limiting any growth in the economy.The highest change magnitude in the number of tourist arrivals was account from tralatitious source markets, such as the UK and the US. Http. //www. euromonitor. com/Zimbabwe The managed exchange vagabond and high pompousness evaluate make budgeting hard. The introduction of impairment guarantees by the government in the sector meant that RTG could non affix their termss in line with puffiness as they were supposed to request for price increases first whereas their expenses were increasing hence acrimonious down their earns unreasonably.The ramp ant dearth of basic commodities such as viands and drinks increase costs as add up could non match demand it to a fault meant that hotels and restaurants could non offer dish outs to its guests and thereof a drop in r regular(a)ues and standards of operate. A high unemployment rate of about 94% and a shrinking economy overly meant that the local customers had no disposable income as 98% of the population was living chthonian the poverty datum line and had to cut back on leisure activities.The tourism sector overly ca use upd a crumbling air transport sector, with ramifications for the entire economy and the withdrawal of a number of honored airlines, citing viability lines. Approximately 18 international airlines argon describe to sustain left the land since the start of the economic crisis in the stratum 2000. few of the airlines that pulled out of the Zimbabwe route were Zambian Airways, British Airways, Swissair, Lufthansa, KLM and Air France. naughty fuel prices, combined with political and economic turbulence, were the reasons cited for the withdrawals.Zimbabwes isolation was a major devastate to the already ailing travel and tourism industry, which relies heavily on high-spending incoming tourists. (www. new-fashionedlyzimbabwe. com) settle and impersonals of the enquiry The objective of this enquiry is to name out how RTGs trading and monetary cognitive ope proportionalityn over the three stratum goal 2007 to 2009 contributed to Zimbabwes economy when it was in a massive economic fadeout and when foreign nones and jobs were needed nigh.RTG is a major player in the tourism sector which contributes a significant accord to the GDP of Zimbabwe thereof RTGs work and financial cognitive ope balancen was not only important to its sh atomic number 18holders but besides to the integral economy. To achieve this objective the tec entrust to a fault try the following * To test how RTG measures and taskes its executi ng. * To find out what strategies RTG adopted to pair its course sector and financial make objectives. * To assess whether RTGs business and financial mental process was adequate to pass away the economic crisis it was confront. The inquiry aims to answer the following questions What measures were apply by RTG to assess the business and financial consummation and were they adequate? * What were the strategies RTG utilise to achieve its business and financial objectives and were they adequate? * How did RTG perform essayd to its primary(prenominal) competitors? * How did RTGs business and financial mathematical process contribute to the economy of Zimbabwe? * Did RTG meet the expectations of any its stakeholders? * How can RTG amend its mathematical ope balancen? explore approach The research worker employ a case study approach employing some(prenominal) qualitative and quantitative techniques to evaluate the death penalty of RTG.This approach enabled the in vestigator to make a equilibrize sound judgement and to consider opposite stakeholders participations that business leader be tough to measure quantitatively. To answer the high(prenominal) up questions the tec altogetherow for use tralatitious techniques such asratio summary and trend compend to raise the patterns of performance while similes with some other judicatures in the same industry bequeath excessively be done. Modern techniques such as Kaplan and Nortons balance visiting card go forth excessively be used in articulate to develop a all-inclusive exemplar of assessing the business and financial performance of RTG.Gaps will be identified, conclusions drawn and recommendations will be made as to how RTG can improve its business and financial performance in upcoming. PART IIINFORMATION GATHERING AND account / BUSINESS TECHNIQUES Introduction Description of methods This branch identifies the research methodologies which will be used for selective i nformation gathering by the tec. research methodology refers to a whole range of questions about the assumed, appropriate ways of overtaking about neighborly research and is wherefore a theory or an psychodepth psychology of how research should operate (hitchcock and hughes 199520).Data accumulation procedures Data line of battle is about use the selected methods of investigation which Robson (1997304) believes there is no to a greater extent often than not beaver methods as all methods buzz off their weaknesses. Various methods of selective information collection were used in this research and the following argon the special and vicarious data collection methods that were used. Primary methods * Interviews * Observation Secondary methods * books * journals and publications * meshing * Published financial natures Secondary data Secondary data atomic number 18 statistics not garner for the immediate study at hand but some other purpose. Churchill 2002). Secondary dat a was used in this research to get an in-depth understanding of the business and financial performance of RTG. Saunders (2007) gave the following advantages and disadvantages of secondary data military issuess * Saves fourth dimension and bills * High quality of information comp ard to data gathered by an individual at the point of research * Provides a general fashion model for comparing data sedate by the individual. Disadvantages * Accessibility of data whitethornbe costly or fractious * The purpose why the secondary data was collected whitethorn not be relevant to the research creation underinterpreted. There is no control over the quality of secondary data therefore accuracy perchance operose to verify * Information gathered whitethornbe out erad Primary data Advantage * The most important benefit of first-string data is that data is original. Disadvantages * Results may not be representative of what is found in the population * The flexible nature of methods used c an extend in enigmatical results Research instruments Interviews An interview is a social survey conducted in a nerve to face or personal conduct situation.Heyward and Sparks (1984) specialise an interview as an occasion when one or two people ask questions that fitk to find out opinions and ideas. Advantages of interviews boldness to face * Immediate feedback * Quick feedback * delicate to tell whether respondent understood the questions, * bodily gestures and personal contact adds emphasis * allows for a wide exchange of ideas * Good relations argon established E-mails and Telephones * Immediate feedback * entrance for always busy interviewees * E-mails can be easily stored for other uses Disadvantages of interviews Face to face * Data is challenging to record, code and give out * m consuming interviewee accessibility may be difficult * The interviewee maybe disobliging E-mails and Telephones * late feedback caused by disruptions imputable to lucre congestion and tec hnical breakdowns * High earpiece charges Literature review 1. 1. 11. 1. 1 pecuniary performance Financial performance is a subjective measure of how well a firm can use additions from its primary mode of business and generate revenues. It measures a firms overall financial health over a inclined(p) tip of time and/or compare with similar firms across the same industry www. investopedia. com/terms/f/financialperformance. asp 1. 1. 2 Business PerformanceBusiness performance can be defined as the integration of financial and non-financial systems and processes to achieve cheek goals and objectives http//en. wikipedia. org/wiki/business_performance_management Business performance is about creating foster for the stakeholders of a business. Measuring business performance is therefore rattling subjective and conclusion sui elude measures is in truth difficult. An organizations business and financial performance cannot be measured in isolation it has to be compared with anteced ent periods or other organizations in the same economic sector victorious into consideration the attach tos business environment.Business performance is guided by an organizations vision and legation these outline the aims to be achieved and the desired end results. Research Approach The research worker will use a variety of business and financial performance measures. Firstly the detective will consider traditional financial performance measures such as return on roof employed, liquidness pitch forefingers, earning per share and trend analysis which shows the determine added to the shareholders investments.The traditional contention is that shareholders are the legal owners of a company and so their interestingnesss should and so be to maximize shareholder wealth. luckholders are generally have-to doe with with the following * Current stipend * future day earnings * Dividend form _or_ system of government * Relative The objective of wealth maximization is usually grow into three primary objectives which are pick growth and to make benefit Kaplan 2007184) traditionalistic financial performance measures will be used to measure how RTG has been able to pander its shareholders. Weaknesses of ratio analysisAs illustrated by Owen G (1994386) the following are the main(prenominal) weaknesses of apply ratio analysis * It uses historic information which maybe out of date * Can mislead when making comparisons if accounting policies are incompatible * Can be perverse by one-off transactions * Takes no account of cyclical changes throughout a period * One dimensional To richly assess the business and financial performance of RTG the researcher will similarly use non-financial performance measures through the use of the balance gradecard and other performance measures. The balance scorecardThe match scorecard was real by Kaplan and Norton as cited in Kaplan ACCA P5 (2009) defines it as a tool to translate an organizations vision and sch ema into objectives and measures. It looks at four military positions namely financial perspective, customer perspective internal business perspective and learning and growth perspective. The aim of the balance scorecard is to enable the business to develop a comprehensive framework for translating a companys strategic objectives into a coherent set of goals and performance measures. Kaplan ACCA P5 (2009)Limitations of the balanced scorecard Neely (2002) argues that the most difficult problem of Balanced Score Card (BSC) is that it deficiencys several(prenominal) important interest groups in its structure such as suppliers, co-operation partners and close neighbors. The worldwide Institute of Management (2002) states the following slaying pit kick the buckets and confinements of the Balanced Score Card * get the jacket to fit the person do not cut the person to fit. * The balanced scorecard should not be balanced, achievement factors are not equal and their relationships are no t linear.Trying to balance the scorecard will lead to confusion, conflict and lack of focus. * Insufficient cause and effect relationships and performance drivers. * Conflict of interest (different stakeholders penury different things) * Measuring intangible additions (information and human hood) is difficult. different measures of performance The researcher will also use other Critical conquest factors and Key performance indicators such as revenue per and way of life occupation evaluate, among others to in full analyze the performance of RTG Ethical issuesThe researcher took into consideration ethical issues such as confidentiality and objectivity in carrying out the research and analysis. The researcher assured RTG that he was going to use the information he collected strictly for academic purposes. The researcher also assured all the individuals he interacted with that he was going to be objective in analyzing the information they provided. All the information the resear cher obtained was kept secure at all measure to preserve anonymity and confidentiality. . PART 3 Results, analysis, conclusions and recommendationsThis section is dedicated to the manifestation of the data collected, its interpretation, drawing of conclusions and making recommendations. The researcher will start by presenting and analyzing his findings on the financial performance of RTG for the period 2007 to 2009 using ratio and trend analysis. In latter(prenominal) sections the researcher will present his findings and analyze RTGs performance using non-financial performance indicators to assess its business performance. 3. 1 traditional Financial Ratios of RTG 3. 1. 1 Profitability ratios of RTG summary of scratchability was made actually difficult by the hyper pomposityary environment that was in Zimbabwe amid 2007 and 2008. On 14 February 2008, the Central statistical voice announced that the inflation rate for celestial latitude 2007 was 66,212. 3%. On 20 February 2008, the Central statistical Office state that officially, inflation had in January 2008 gone last(prenominal) the 100,000% mark to 100,580. 2%. On 4 April 2008, the Financial Gazette (FinGaz) inform that officially, inflation in February 2008 jumped to 164,900. 3%. On 15 May 2008, the Zimbabwe Independent reported that officially, inflation in March 2008 jumped to 355,000%.On 21 May 2008, SW Radio Africa reported that, according to an independent financial assessment inflation in May 2008 jumped to 1,063,572. 6%. The state statistical value in April 2008 utter there were not fair to middling goods in the shortage-stricken shops to tramp any new (official) figures. On 26 June 2008, the Zimbabwe Independent reported that, latest figures from the Central Statistical Offices (CSO) showed that stratumbook inflation rose wine by 7,336,000 character points to 9,030,000% by June 20 and was set to end the month at well above 10,500,000%.According to Central Statistical Office statisti cs, annual inflation rate rose to 231 million percent in July 2008. The month-on-month rate rose to 2,600. 2%. By December 2008, inflation was estimated at 6. 5 quindecillionnovemdecillion percent (65 followed by 107 zeros) The Zimbabwe Central statistical part stop publishing inflation figures and therefore the Zimbabwe Consumer Price Index was not uncommitted to adjust the 2008 financial statement figures.The historic figures used were out of date and comparison of costs and revenues gave a fake motion picture and thus care should be taken in interpreting them. The researcher therefore could not analyze trends in revenue and cost as they had been heavily malformed by inflation and no adjustments could be made as the Central Statistical Office stopped publishing the inflation figures and the Consumer Price Index. Gross Profit staring(a) do good The gain take in gross get ahead margins of RTG in 2007, 2008 and 2009 were 74%, 99% and 84% respectively. The gross profit mar gin shows the gross profit generated per twain dollar sign of sales.In 2009 Africansun limiteds gross profit margin was 65% therefore showing that although RTGs gross profit margin had decreased from the prior year it was console get out than its competitor. In the researchers interview with Mr L Chasakara RTGs trading operations managing director, he said thatRTG managed to increase its gross profit margin from 74% in 2007 to 99% in 2008 by specifically targeting the domestic market. Sales from the domestic market were change magnitude from 78% in 2007 to 83% in 2008 as the foreign market was deteriorating due to the political instability in Zimbabwe in this period.The researcher only also state that the increase in gross profit margin from 74% in 2007 to 99% in 2008 could have been due to the fact that the use of historical cost in 2008 amplify revenues due to high inflation figures and under utter costs as most costs had been incurred earlier in the year. tax income will generally be over tell in hyperinflationary environments if historical costs are used as costs are ordinaryly incurred forwards revenues are realized. kalet Profit Margin The engagement profit margins of RTG in 2007 was (0. 62%), it rose dramatically in 2008 to 879% indeed decreased once more sharply to 0. 13% respectively. In 2008 the net profit margin was heavily distorted by the RTGS investment income which it gained from trading on the Zimbabwean Stork exchange which was thriving at this time. In 2009 the use of the united States dollar as the official bullion in Zimbabwe (Dollarization) saw inflation displace to to a lower place zero percent. This resulted in more realistic profitability ratios with the gross profit margin dropping to 84% from 99% in 2008 and the operating net profit margin dropping to 0. 913% in 2009 from 879% in 2008.Removing investment income from the net profit before interest and tax in the 2008 statement of financial position gives us a ne t profit margin of 17% which is more indicative of RTGs performance in 2008. The researcher asked Mr L. Chasakara, RTGs operations director if the large sugar that RTG had reported in 2008 were a true meter reading of its performance. Mr L. Chasakara responded utter these were unusual results in unusual circumstances we did what we had to do in exhibition to survive and excel in one of the most hostile economic situations in historyThe trend in the gross profit margin and the operating and the net profit margins of RTG from 2007 to 2009 is presented in the table downstairs stem Kembo H (2011) The table below shows the trend in net profit margin later subtracting investment income from RTGs 2008 net profit before interest and tax Source Kembo H (2011) production on Capital Employed (ROCE) ROCE is an indicator of the managements efficiency in generating profit from resources. In 2007 RTGs ROCE was 2%, it then rose sharply to93. 5% in line with the high pay that were earned in 2008 and then came down to 29. % in 2009. In 2009 Africansun restrain which is RTGs main competitor had a veto ROCE of 18. 75%. Therefore even though RTGs ROCE dropped from 93. 5% in 2008 to 29. 1% in 2009 it alleviate was better compared to its rival in the Zimbabwean tourism industry. RTGs ROCE was also higher than the number borrow rate in 2009 of 15% which meaning that RTG added value to its investors bullion as it managed ROCE above the minimum borrowing rate to compensate for the extra fortune they took upon investing in RTG. addition disturbanceThe addition disorder ratio shows the revenue generated per dollar of assets that is the efficiency of assets in generating revenue. RTGs asset derangement ratio for 2007 was 0. 20 measure per annum then decreased to, 0. 094 generation then rose to 0. 92 times per annum The Asset turnover trend between 2007 and 2009 is shown in the table below Source Kembo H (2011) In 2007 and 2008 investment income contributed to the b ulk of the net profit therefore RTGs asset turnover ratios were really poor at 0. 20 times per annum and 0. 94 times per annumrespectively. This suggests that the group was using its funds for other investments kind of than its operating activities as the operating environment was extremely hostile. In the researchers interview with the Operations director of RTG, heexpressed that this move was necessary for survival as the mismatch of revenues and costs due to hyperinflation meant normal operations of the RTG would result in dangerous losses. Asset turnover of RGT improved dramatically in 2009 rising to 0. 2 times per annum meaning that the group was using its assets in effect to produce revenue. Although RTGs asset turnover ratio improved in 2009 it fades in comparison with its main competitor Africansun limit which had an asset turnover ratio of 1. 32 times a year. This delegacy that RTG was less efficient in generating revenue from its capital than its competitor. Working Capital Ratios Current ratio The period ratio measures the adequacy of real assets to meet liabilities as they fall due. (Financial reportage F7 Kaplan 2009) In 2007 RTGs current ratio was 0. 71 which meant that RTGs could not table service its liabilities in the event that they fall due. In an interview with the researcher the comptroller of RTG Mr G Nzunga said hyperinflation made it difficult to reinforcement too much immediate payment it would quickly be eroded, thus they had to vallecula their resources into the acquisition of tangible assets and keep current assets at a minimum. In2008there was further decrease of the current ratio to 0. 321 as inflation continued to mount and most people discouraged to keep cash or cash equivalents.In 2009 the current ratio of RTG was 0. 761, an benefit from the 2008 current ratio but still not satisfactory. In 2009 the use of the united States dollar as the official currency in Zimbabwe (Dollarization) saw inflation dropping to bel ow zero percent thus the profit as the economic environmentbecame began to normalize. Mr G Nzunga, RTGs restrainer said that RTG was still in a difficult position as far as operative capital management was concerned as a liquidity crisis began across industry soon after dollarization in Zimbabwe in 2009.The company was not generating enough bullion from its day to day activities to pay broadly suppliers and other current liabilities as they cut down due. In 2009 Africansun modified which is the biggest tourism group in Zimbabwes current ratio was 0. 491. The liquidity crisis in Zimbabwe made it very hard for companies in Zimbabwe to bind decent current ratios and most of them had to employ truculent works capital management. With a current ratio of 0. 761 RTG is considered to have performed quite well given the surrounding circumstances. Inventory Turnover compass point callable to lack of information the researcher was unable to calculate RTGs instrument turnover ratios, receivables periods and payables periods for the yearn time 2007-2008 and could only calculate the account turnover ratio, receivables and payables periods for the year 2009. RTGs inventory turnover ratio for the year 2009 was 143 days which was very bad considering the fact the larger percentage of RTGs inventory is food that they sell to guests. Normally in the food industry inventory turnover should be fairly quick so as to preserve the reputation of the company and quality of the meals served.Africansuns inventory turnover in the same period was 70 days which was better than that of RTG in this period. The comptroller of RTG input signaled in this high ratio say that they purchased large amounts storks to avoid the effects of stork outs in the event of food shortages which were plebeian in Zimbabwe in 2008. In 2008 the retail and food industries were almost facing ruin as shelves in shops went empty due to the economic and political challenges Zimbabwe was facing, theref ore it was generally liable for RTG to keep relatively large amounts of stork.Payables limit RTGs payables period was 726 days in 2009 which represents the credit rating period it was taking from its suppliers. RTG had such a bad payables period principally due to liquidity problems that the majority of companies was having in industry and partly as an truculent working capital management strategy. This however resulted in RTG gaining a very bad credit reputation from its suppliers. One of their major security suppliers Chubb Locks Manager was once quoted saying RTG is the worst paying(a) customer in the country.Some suppliers have stopped supplying RTG as a result of RTGs bad credit record but because they are a large firm RTG still gets new suppliers. Some suppliers now demand cash for all purchases made by RTG. RTG has also been coerce to purchase their supplies from more expensive suppliers or poor quality supplies. RTG is also losing out on discounts they could gain by p aying promptly. In an interview with the researcher Mr G Nzunga the accountant for RTG said that the company did not have enough liquid funds to pay all their suppliers.He also stated that it was also part of an vulturine working capital management strategy as they were receiving free financial backing from creditors. He however admitted that the strategy was getting over-aggressive and it was ethically questionable to pursue this strategy any further. In the same period African suns payables period was 12 days which was better than RTGs period and hence its good reputation with suppliers across the industry. Receivables Period The receivables period for RTG in 2009 was 94 days.This was in line with their credit policy which states that the credit period allowable to customers should be three months. The receivables period for African sun was 59 days in 2009 which was better than RTGs period this obviously shows that African sun Limited faces less risk of exposure from irrecovera ble debts. Gearing The adapt ratio indicates the degree of financial risk the company is facing and the sensitivity of earnings and dividends to changes in profitability and activity levels. Kaplan ACCA F7(2009)) In the years 2007 and 2008 RTG did not have any unyielding term borrowing thus the wagon train ratio was zero. This meant that risk for financial risk for RTG was very low. Hyperinflation in Zimbabwe made long term loans difficult to get as any lender would find it very difficult to set interest rate as inflation was highly episodic in this period. The value of any money borrowed could be eroded within days if not hours therefore no companies had purposeful long term liabilities.In 2009 after the introduction of the US Dollar as the official currency in Zimbabwe companies started geared wheel up although the liquidity crisis that followed made it difficult to get funding from local financial institutions. In 2009 the string ratio for RTG was 2%. RTGs appurtenance ra tio was very low and induced very petty(a) credit risk to the shareholders. A low gearing ratio marrow that RTG has the setting to borrow more if there are any profitable ventures in the future and for their current refurbishment and expansion project at their AZambezi River Lodge unit and increasing the groups get on capacity.Financing will also be cheap for RTG as lenders will face very low levels of risk in extending loans to them. In 2009 Africansun Limiteds gearing ratio was also very low at 3. 5% which means it also had low levels of financial risk. The low gearing across industry also reflected the liquidity crisis which was eminent in Zimbabwe in 2009 where lenders did not have the funds to extend loans to firms and they were also still skeptical about the economic and political situation in Zimbabwe. disport CoverInterest cover is the ability of a firm to pay interest out of its profits. In 2009 RTG Interest coverwas1. 52 timesand indicated that the shareholders divide nds were at risk. expect-still the ability of RTG to pay its interests having emerged from difficult economic times should satisfy its shareholders as Africansun Limited its major competitor failed to make profits to pay for their finance costs. Earnings Per Share The earnings per share of RTG for 2008was384 billion Zimbabwean dollars per share and the earnings per share for 2007 was 253. 7 Zimbabwean dollars per share.Converting these figures to United States dollars at the unauthorized exchange rates that were ruling at the 2007 and 2008 year ends would make the respective earnings per share figures less than 0. 000001 US cents. Due to the hyperinflation in these periods the researcher found analyzing these figures very difficultand almost impossible. The earnings per share for RTG in 2009 was USD0. 01 which was quiet impressive compared to its rivals in the tourism industry as most of them. In 2009 the earnings per share for African sun Limited was negative USD0. 8. Customer place Occupancy rates One of the main indicators of performance in the tourism industry is the line of work rate of hotels. RTG managed an line of work rate of 44% in 2007 which was below the Zimbabwean tourism industry average business rate of 45%. In the tourism industry the more customers are cheerful by your service the higher your job rate will be. In 2008 the tenancy rate of RTG decreased by 9% to 37%. The decrease in occupancy rate was due to the economic and political instability during the 2008 Zimbabwean Elections were here was widespread violence in the country, therefore the number of tourists decreased. Most airlines also pulled out of the country ma The industry average room occupancy rate in Zimbabwes tourism industry was 41% which was higher than that of RTG which was 37%. This shows that RTG performed badly compared to peers in the tourism industry. The fall in RTGs occupancy rate can therefore be attributed to failure to satisfy customers better than its riva ls. In 2009 RTGs occupancy rate increased to 40% which was an increase of 3% from the 2008 occupancy rate.The increase could be attributed to the improvement in the political and economic environment in Zimbabwe after the formation of a administration of National Unity (GNU) and the dollarization of the economy. The industry average occupancy rate for 2009 was 31% which was 9% below that of RTG. In an interview with the researcher Mr L Chasakara the operations director for RTG attributed the higher occupancy rate to better soft touch management, better marketing strategies and service excellence. RTGs higher occupancy rate means that it was more able to satisfy its customers better than its competitors.RTGs main competitor and the largest hotel group in Zimbabwe African sun Limiteds occupancy rate in 2009 was 32% showing that RTG performed exceptionally well in 2009 in managing to attract customers The table below shows RTGs occupancy rate compared to the tourism industry average Source Kembo, H(2011) . In an interview Mr G Nzunga RTGs accountant said that the occupancy rates also improved because 65% of their sales come from repeat business from quelled guests and large groups of organizations who hold seminars at RTGs hotels.Service lead time In 2009 RTG managed to reduce its service lead time in its hotels to an average of 20 proceeding between the time food in restaurants and rooms is ordered to the time it is served. In 2007 and 2008 the average service lead time was 30 minutes. Better dressing and process improvement helped in achieving the reduction in service lead time as said by the Mr L Chasakara the operations director for RTG, he also added that benchmarking against the best restaurants also helped in achieving the improvement.In 2007 RTG was not recording complaints in late service delivery to customers but in 2008 RTG save 2700 complaints and the figure improved to 1100 in 2009 which was a 59% improvement. This improvement shows that RTG imp roved in satisfying its customers in 2009. Service spirit RTG keeps books at all its hotels were customers are asked to lay aside a comment on the services they would have received before they leave. A review of these books at two of RTGs units Victoria Falls Rainbow Hotel and AZambezi showed the results presented in the table belowComment 2007 2008 2009 thriving 98% 96% 99% hostile 2% 4% 0. 9% get out Return 68% 80% 70% Will not Return 0% 0% 0% The results from the review of the comment books showed that the majority of guests were satisfied by the service they received on staying at RTG units which means that RTG performed very well in this regard. intrinsic perspective Room service complaints were 3500 in 2007 and increased to 4550 in 2008. This was in general due to the shortage of basic commodities in Zimbabwe in 2008.Shortage of commodities meant that the hotel could not provide its customers with some luxury items they were used to having any time they visited and hen ce the increase in complaints. The Accountant at RTG Mr G Nzunga explained that they made sure that their module would explain the situation very carefully to the customers and extensive training of staff keep in lined that they were able to utilize the few commodities that were available. In 2009 complaints decreased to 2900. This could partly explained by the end of the commodity crisis in Zimbabwe.This also shows that RTG managed to improve its internal processes to reduce the number of complaints they were receiving from customers yearly. accomplishment and innovation RTG has invested heavily in the training of its staff in order to give better service to its customers. RTG has opened a Hotel School for the training of its workers and other outside(a) students. The commitment of RTG to continuously improve its operating processes and learn new ways of doing things has seen them being able to keep costs low and increase room capacity to make when its competitors are making lo sses and their occupancies are dropping.In an interview with the researcher Mr G Nzunga RTGs Accountant said that every worker at RTG attends at to the lowest degree 1 seminar every month in order to keep them abreast of changes and new ways of doing things. Interview review challenge1 In the first question the researcher asked the operations director and the accountant of RTG what their financial and business objectives were. The receptions can be summarized as follows * To be profitable and to create value for our shareholders. * To survive and grow in the long graze thus protecting the interests of all our stakeholders. In 2008 the main objective was to survive in the harsh economic climate in order to save the tourism industry and the Zimbabwean economy itself * To achieve service excellence in tourism and hospitality. unbelief 2 In question 2 the researcher asked the accountant of RTG how they measure their business and financial performance. In response he said RTG assess es its performance through traditional financial performance measures such as ratio analysis and trend analysis and other modern measures oddly the balanced scorecard as they are every bit concerned about the qualitative aspects of performance. query 3 In the third question the researcher asked the accountant and the operations director of RTG if they could explain the trend in the ratios that had been metric from 2007 to 2009 financial statements. They gave mingled explanations for all the fluctuations in these ratios some of them have been quoted in the analysis of these ratios in the section above. The most common response to the financial ratios was that they were unusual results in an unusual environment referring to the hyper inflationary environment that was in Zimbabwe during this period.Question 4 Question 4 was to establish which strategies RTG used to ensure that they met their business and financial objectives. In response the accountant and operations director sketc h the following as some of the strategies they utilise * Employing an aggressive working capital strategy to mitigate the liquidity and operational challenges they were facing * Investing in money markets earlier than core operating activities to improve the cash and revenue inflow. Focusing on the local markets rather than the traditional international markets that had been negatively impacted by bad publicity and political instability. * Process and service improvement through employee training. * Intensive marketing both nationally and internationally * Strict stock management to curb the shortages of basic commodities that were rule as a result of price controls by the government. Questions 5, 6 and 7 These questions were to establish how RTG business and financial performance contributed to the economy and how it can improve its performance in future.In response the interviewees stated that in making profits and surviving through the historic hyperinflationary environment in the period under review RTG saved the tourism industry in Zimbabwe as its dip would have surely resulted in the open of the tourism and hospitality industry. They also stated that they managed to save thousands of jobs and provided business for hundreds of their suppliers. They also stated that to improve performance RTG would spend more on capital through hotel refurbishments and also taking advantage of their low gearing by taking loans thus up working capital.They also stressed the need to advertise and restore the image of Zimbabwe as a tourist destination. Conclusion The researcher found out that RTG uses both financial and non-financial performance measures through the balanced score card which gives a comprehensive framework for performance measurement. This ensures that both quantitative and qualitative performance objectives are assessed. RTG used various strategies to ensure that it met its financial and business objectives which were mainly to survive the harsh economi c environment and to protect its investors employees and all its stakeholders.RTG used strategies such as aggressive working capital management, investing in the money markets or else of its core operational activities and shifting their assistance on the local market rather than the traditional international market. RTG also innovated through constantly innovating and improving its processes to achieve its business and financial objectives. Limitations of results The major limitation of these results is the inaccessibility of inflation adjusted figures for the proper analysis of financial ratios and trend analysis which cogency have given a false picture.The researcher held interviews with only 2 members of the administrator management team which might have given a narrow picture of RTGs performance. Interviewing all members of the management and the get on with would have given the researcher a broader understanding of the business and financial performance of RTG, but time a nd the availability of most of these people was a challenge. The researcher could not visit all RTG companies due to limitation of resources as they are geographically dispersed.This might have limited the researcher especially when he looked at the qualitative aspects of RTGs performance. Recommendations The researcher recommends that RTG should employ less aggressive working strategies. RTGs current working capital strategy may see suppliers refusing to supply them with critical supplies. RTG might also face legal action from its suppliers which may increase its legal costs and even loose customers who may not want to be associated with firms who have bad credit reputation.RTG should thus reduce its payables period to a more reasonable period of by chance 90 days. The researcher also recommends that RTG should increase its gearing levels as they are presently very low in order to take advantage of loans which provide cheaper financing than equity. Zimbabwes reputation as a safe tourism destination was in earnest damaged due to the political and economic instability in 2007 and 2008. The researcher thus recommends that RTG should form partnerships with other players in the tourism industry to market the Zimbabwean brand in the international tourism market.