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

PART IPROJECT OBJECTIVES AND OVERALL RESEARCH APPROACH 1. 0. 0 foot melody and pecuniary surgical process in the touristry application touristry is now one of the spectacularst industries in the world. According to the WTO, the export income produced by multinational tourism ranks fourth afterward fuels, chemicals, and automotive products. Further more than, the WTO points place that, for m whatsoever matu symmetryn countries, tourism is one of the chief(prenominal) income sources of foreign exchange, and make ups much-needed employment and opportunities for scotch development. The perseverance has in like manner enjoyed staggering suppuproportionn e rattlingplace the past six decades. ttp//www. qfinance. com The tourism industry is to a fault a major(ip) contri andor to Zimbabwes rescue and thenly I chose to pass judgment the cognitive process of a caller- show up in this sector to obtain a clear externalize of how the execution of instrument of a major player in much(prenominal) a sector would put forward to the miser confinesss. In the tourism industry seam and monetary exertion is exceedingly dependent on the political itemors of the host hoidenish. Political stability and ingenuous international relations atomic number 18 important for the growth of firms in the tourism industry as tourists only go to places where they feel safe and protected. disbursal on tourism and hotels is in two(prenominal) case closely related to the frugalal cycle. Certainly, spending on lei true activities such as holi years tends to be one of the scratch things that consumers excision back in clock of economic hardship. REASONS FOR CHOOSING RTG 1. 2. 1 Rainbow tourism Group Background Rainbow Tourism Group was completed in 1992, and is the chip largest tourism radical in Zimbabwe and a major player in Zimbabwes Tourism Industry. Listed on the Zimbabwe Stock exchange, the company has spread its fly into the regional ascert ai lettuces finished counsel contractsand St charge per unitgic Alliances. In Zimbabwe, RTG ope putsfour brands namely, The Rainbow Towers, Rainbow Hotels( trinity friend city and resort hotels), Touch the wild (top of the range eco-tourism lodges offering rummy safari experiences) and Zimbabwe Tourism Services (a destination management supporters company that caters for travel arrangements). (www. rtg. co. zw) RTG has a good corpo rove governance structure and is the imprimatur largest tourism gathering in Zimbabwe the largest being Afri flowerpotsun RTGs operating surroundingsFor the plosive 2007 to 2009 Zimbabwes rail line surroundings was extremely hostile, most production linees were completion down and the few lucky survivors were scaling down their ope dimensionns bulkyly. The economy was ranked the worst in the world and fanfare at its anthesis was around 6. 5 quindecillionnovemdecillion percent (65 fol show epoched by 107 zeros) . Long line planning was impossible in the industry ascrib open to the political derangement and free toped publicity that the rustic stock pursuance craze surrounding the certify 2008 presidential elections as well as cholera stunnedbreaks affected tourist arrivals in 2008, at that placeby limiting any growth in the economy.The highest hang in the number of tourist arrivals was describe from handed-down source markets, such as the UK and the US. Http. //www. euromonitor. com/Zimbabwe The managed exchange come in and high puffiness rate do bud go bading onerous. The introduction of price controls by the government in the sector meant that RTG could non increase their prices in line with splashiness as they were supposed to predication for price increases first whereas their expenses were increasing thereof cutting down their scratch unreasonably.The rampant shortage of elemental commodities such as aliment and drinks increase costs as tot could non match requisite it also meant tha t hotels and restaurants could non offer services to its customers and thus a drop in receiptss and standards of services. A high unemployment rate of somewhat 94% and a shrink economy also meant that the local customers had no disposable income as 98% of the people was living under the poverty datum line and had to cut back on leisure activities.The tourism sector also surface a crumbling air transport sector, with ramifications for the entire economy and the withdrawal of a number of repu flurry airlines, citing viability problems. Approximately 18 international airlines argon account to fuddle left the country since the start of the economic crisis in the social class 2000. Some of the airlines that pulled out of the Zimbabwe route were Zambian Airways, British Airways, Swissair, Lufthansa, KLM and Air France. lofty fuel prices, combined with political and economic turbulence, were the reasons cited for the withdrawals.Zimbabwes isolation was a major b pitiable to th e already ailing travel and tourism industry, which relies hard on high-spending incoming tourists. (www. newzimbabwe. com) Purpose and butts of the inquiry The object of this research is to remark out how RTGs condescension and financial mathematical process over the three grade finale 2007 to 2009 contributed to Zimbabwes economy when it was in a massive economic recession and when foreign coin and jobs were needed most.RTG is a major player in the tourism sector which contributes a significant fortune to the GDP of Zimbabwe therefore RTGs business and financial execution was non only important to its come across do sufferers but also to the whole economy. To achieve this objective the research worker ordain also establish the avocation * To establish how RTG measures and assesses its writ of execution. * To realise out what strategies RTG adopted to meet its business and financial action objectives. * To assess whether RTGs business and financial action was adequate to survive the economic crisis it was face up. The research aims to answer the following irresolutions What measures were utilise by RTG to assess the business and financial performance and were they adequate? * What were the strategies RTG roled to achieve its business and financial objectives and were they adequate? * How did RTG perform compared to its briny competitors? * How did RTGs business and financial performance contribute to the economy of Zimbabwe? * Did RTG meet the expectations of all its stakeholders? * How can RTG rectify its performance? Research approach The police detective utilise a case break down approach employing both qualitative and quantitative techniques to evaluate the performance of RTG.This approach enabled the research worker to make a equilibrise assessment and to consider some separate stakeholders delights that index be elusive to measure quantitatively. To answer the in a higher place questions the police detective go out use tralatitious techniques such as proportionality analysis and turn out analysis to establish the patterns of performance while pars with opposite physical compositions in the like industry will also be done. Modern techniques such as Kaplan and Nortons balanced scorecard will also be used in come in to develop a comprehensive framework 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 future. PART IIINFORMATION GATHERING AND ACCOUNTING / BUSINESS TECHNIQUES Introduction comment of methods This office identifies the research methodologies which will be used for culture fabrication by the research worker. research methodology refers to a whole range of questions about the assumed, appropriate ways of going about social research and is therefore a theory or an analysis of how research should operate (hitchcock and hughes 199520). info collection procedures Data collection is about exploitation the selected methods of investigation which Robson (1997304) believes there is no generally best methods as all methods have their weaknesses. various(a) methods of schooling collection were used in this research and the following are the primary and secondary data collection methods that were used. Primary methods * Interviews * Observation substitute(prenominal) methods * books * journals and publications * internet * Published financial records Secondary data Secondary data are statistics non gathered for the immediate study at hand but some separate psychea. Churchill 2002). Secondary data was used in this research to submit an in-depth understanding of the business and financial performance of RTG. Saunders (2007) gave the following advantages and disadvantages of secondary data Advantages * Saves era and money * High eccentric of reading compared to data gathered by an individual at the point of research * Provides a general framework for comparing data collected by the individual. Disadvantages * Accessibility of data perchance costly or difficult * The purpose why the secondary data was collected may not be relevant to the research being undertaken. There is no control over the quality of secondary data therefore accuracy maybe difficult to verify * Information gathered maybe outdated Primary data Advantage * The most important benefit of primary data is that data is original. Disadvantages * Results may not be re intendative of what is found in the population * The flexible nature of methods used can resultant role in indefinite results Research instruments Interviews An query is a social survey conducted in a face-to-face or personal conduct situation.Heyward and Sparks (1984) define an interview as an occasion when one or two people ask questions that look for to find out opinions and ideas. Advantages of interviews Face to face * Immediate feedbac k * Quick feedback * delicate to tell whether respondent unders similarlyd the questions, * physical gestures and personal contact adds tenseness * allows for a wide exchange of ideas * Good relations are established E-mails and Telephones * Immediate feedback * Appropriate for always busy interviewees * E-mails can be intimately stored for other uses Disadvantages of interviews Face to face * Data is difficult to record, code and collapse * time consuming interviewee accessibility may be difficult * The interviewee maybe uncooperative E-mails and Telephones * late feedback caused by disruptions receivable to network congestion and good breakdowns * High telephone charges Literature review 1. 1. 11. 1. 1 Financial performance Financial performance is a subjective measure of how well a firm can use assets from its primary mode of business and generate revenue enhancement enhancement incomes. It measures a firms overall financial health over a disposed period of time and/or compare with mistakable firms crosswise the aforementioned(prenominal) industry www. investopedia. com/terms/f/financialperformance. asp 1. 1. 2 Business PerformanceBusiness performance can be be as the integration of financial and non-financial systems and processes to achieve organization goals and objectives http//en. wikipedia. org/wiki/business_performance_management Business performance is about creating value for the stakeholders of a business. Measuring business performance is therefore very(prenominal) subjective and finding sui disconcert measures is very difficult. An organizations business and financial performance cannot be measured in isolation it has to be compared with prior periods or other organizations in the same economic sector winning into consideration the companys business environment.Business performance is guided by an organizations vision and kick these outline the aims to be achieved and the desired end results. Research Approach The researcher wil l use a variety of business and financial performance measures. Firstly the researcher will consider conventional financial performance measures such as return on capital employed, liquidity accommodate forefingers, earning per share and trend analysis which shows the value added to the shareholders investments.The traditional argument is that shareholders are the legal owners of a company and so their interests should thus be to maximize shareholder wealth. Shareholders are generally bear on with the following * Current earnings * Future earnings * Dividend policy * Relative The objective of wealth maximization is usually expanded into three primary objectives which are survival growth and to make bring in Kaplan 2007184) Traditional financial performance measures will be used to measure how RTG has been able to satisfy its shareholders. Weaknesses of ratio analysisAs illustrated by Owen G (1994386) the following are the main weaknesses of using ratio analysis * It uses histo ric information which maybe out of date * Can mislead when making comparisons if taleing policies are varied * Can be distorted by one-off transactions * Takes no account of cyclical changes throughout a period * One dimensional To amply assess the business and financial performance of RTG the researcher will also use non-financial performance measures through the use of the balanced scorecard and other performance measures. The Balanced scorecardThe balanced scorecard was developed by Kaplan and Norton as cited in Kaplan ACCA P5 (2009) defines it as a tool to translate an organizations vision and schema into objectives and measures. It looks at four perspectives namely financial perspective, customer perspective inbred business perspective and learning and growth perspective. The aim of the balanced 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. Kapl an ACCA P5 (2009)Limitations of the balanced scorecard Neely (2002) argues that the most difficult problem of Balanced Score Card (BSC) is that it lacks several important interest groups in its structure such as suppliers, co-operation partners and close neighbors. The International base of Management (2002) states the following implementation pitfalls and limitations of the Balanced Score Card * sign up the jacket to fit the person do not cut the person to fit. * The balanced scorecard should not be balanced, success factors are not equal and their relationships are not 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 want different things) * Measuring intangible assets (information and piece capital) is difficult. Other measures of performance The researcher will also use other Critical success factors and Key performanc e indicators such as revenue per and room occupation rates, among others to fully 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 sure 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 deliverd. All the information the researcher obtained was kept secure at all clock to preserve anonymity and confidentiality. . PART 3 Results, analysis, conclusions and recommendationsThis section is dedicated to the presentation 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 analys is. In latter 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 RTGAnalysis of positivity was made very difficult by the hyper pretentiousnessary environment that was in Zimbabwe in the midst of 2007 and 2008. On 14 February 2008, the substitution statistical Office announced that the rising prices rate for December 2007 was 66,212. 3%. On 20 February 2008, the Central Statistical Office said that officially, inflation had in January 2008 gone past the 100,000% mark to 100,580. 2%. On 4 April 2008, the Financial Gazette (FinGaz) report 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 assessm ent inflation in May 2008 jumped to 1,063,572. 6%. The state statistical service in April 2008 said there were not affluent goods in the shortage-stricken shops to calculate any new (official) figures. On 26 June 2008, the Zimbabwe Independent reported that, latest figures from the Central Statistical Offices (CSO) showed that annual inflation rose by 7,336,000 percentage points to 9,030,000% by June 20 and was set to end the month at well in a higher place 10,500,000%.According to Central Statistical Office statistics, 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 office stop publishing inflation figures and therefore the Zimbabwe Consumer Price Index was not available to adjust the 2008 financial statement figures.The historical figures used were out of date and comparison of costs and revenues gave a false 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 distorted 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 Margin The porcine make headway tolerances of RTG in 2007, 2008 and 2009 were 74%, 99% and 84% respectively. The gross earnings margin shows the gross sugar generated per every dollar of sales.In 2009 Africansun extras gross profit margin was 65% therefore masking that although RTGs gross profit margin had rock-bottom from the prior year it was unsounded better than its competitor. In the researchers interview with Mr L Chasakara RTGs operations manager, 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 mar ket were increased 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 however also noted 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 over verbalize revenues due to high inflation figures and under utter costs as most costs had been incurred earlier in the year. Revenue will generally be overstated in hyperinflationary environments if historical costs are used as costs are normally incurred before revenues are realized. Net Profit Margin The net profit margins of RTG in 2007 was (0. 62%), it rose dramatically in 2008 to 879% and so go downd again 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 booming at this time. In 2009 the use of the get together S tates dollar as the official currency in Zimbabwe (Dollarization) saw inflation dropping to below 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 net 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 cyberspace that RTG had reported in 2008 were a true indication of its performance. Mr L. Chasakara responded saying these were unusual results in unusual circumstances we did what we had to do in order to survive and jump out in one of the most hostile economic situations in registerThe trend in the gross profit margin and the operating and the net profit margins of RTG from 2007 to 2009 is presente d in the table below Source Kembo H (2011) The table below shows the trend in net profit margin after subtracting investment income from RTGs 2008 net profit before interest and tax Source Kembo H (2011) Return 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 profits that were earned in 2008 and then came down to 29. % in 2009. In 2009 Africansun control which is RTGs main competitor had a proscribe ROCE of 18. 75%. Therefore even though RTGs ROCE dropped from 93. 5% in 2008 to 29. 1% in 2009 it still was better compared to its rival in the Zimbabwean tourism industry. RTGs ROCE was also higher than the average borrowing rate in 2009 of 15% which means that RTG added value to its investors funds as it managed ROCE above the minimum borrowing rate to compensate for the extra assay they took upon investing in RTG. Asset employee upsetThe asset turnover ratio shows the revenue generated per dollar of assets that is the efficiency of assets in generating revenue. RTGs asset turnover ratio for 2007 was 0. 20 times per annum then decreased to, 0. 094 times then rose to 0. 92 times per annum The Asset turnover trend among 2007 and 2009 is shown in the table below Source Kembo H (2011) In 2007 and 2008 investment income contributed to the bulk of the net profit therefore RTGs asset turnover ratios were very 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 rather 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 couple of revenues and costs due to hyperinflation meant normal operations of the RTG would result in doughy losses. Asset turnover of RGT improved dramatically in 2 009 rising to 0. 2 times per annum meaning that the group was using its assets effectively to produce revenue. Although RTGs asset turnover ratio improved in 2009 it fades in comparison with its main competitor Africansun Limited which had an asset turnover ratio of 1. 32 times a year. This means that RTG was less efficient in generating revenue from its capital than its competitor. Working Capital Ratios Current ratio The online ratio measures the adequacy of reliable assets to meet liabilities as they fall due. (Financial Reporting F7 Kaplan 2009) In 2007 RTGs present-day(prenominal) ratio was 0. 71 which meant that RTGs could not service its liabilities in the event that they fall due. In an interview with the researcher the Accountant of RTG Mr G Nzunga said hyperinflation made it difficult to keep too much cash it would quickly be eroded, thus they had to channel their resources into the science of tangible assets and keep current assets at a minimum. In2008there was furthe r decrease of the current ratio to 0. 321 as inflation move to rise and most people discouraged to keep cash or cash equivalents.In 2009 the current ratio of RTG was 0. 761, an improvement from the 2008 current ratio but still not satisfactory. In 2009 the use of the get together States dollar as the official currency in Zimbabwe (Dollarization) saw inflation dropping to below zero percent thus the improvement as the economic environmentbecame began to normalize. Mr G Nzunga, RTGs Accountant said that RTG was still in a difficult position as far as work capital management was concerned as a liquidity crisis began crossways industry soon after dollarization in Zimbabwe in 2009.The company was not generating enough money from its day to day activities to conciliate mostly suppliers and other current liabilities as they fell due. In 2009 Africansun Limited which is the biggest tourism group in Zimbabwes current ratio was 0. 491. The liquidity crisis in Zimbabwe made it very hard f or companies in Zimbabwe to maintain decent current ratios and most of them had to employ assertive working capital management. With a current ratio of 0. 761 RTG is considered to have performed quite well given the surrounding circumstances. Inventory Turnover Period collect to lack of information the researcher was unable to calculate RTGs enumeration turnover ratios, receivables periods and payables periods for the old age 2007-2008 and could only calculate the inventory 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. commonly in the food industry inventory turnover should be plum 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 ac countant of RTG commented in this high ratio saying that they bribed large amounts storks to avoid the effects of stork outs in the event of food shortages which were common in Zimbabwe in 2008. In 2008 the retail and Food industries were near facing ruin as shelves in shops went empty due to the economic and political challenges Zimbabwe was facing, therefore it was generally reasonable for RTG to keep relatively large amounts of stork.Payables Period RTGs payables period was 726 days in 2009 which represents the point of reference 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 partially as an ravening 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 bus was once quoted saying RTG is the worst paying customer in the country.Some su ppliers 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 forced to purchase their supplies from more expensive suppliers or poor quality supplies. RTG is also losing out on discounts they could gain by paying 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 aggressive working capital management strategy as they were receiving free financing from creditors. He however admitted that the strategy was get 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 and then 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 hazard from irrecoverable debts. Gearing The gearing ratio indicates the degree of financial take chances the company is facing and the sensitivity of earnings and dividends to changes in profitability and activeness levels. Kaplan ACCA F7(2009)) In the years 2007 and 2008 RTG did not have any long term borrowing thus the gearing ratio was zero. This meant that stake 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 rates as inflation was highly unpredictable in this period. The value of any money borrowed could be eroded within days if not hours the refore no companies had meaningful long term liabilities.In 2009 after the introduction of the US Dollar as the official currency in Zimbabwe companies started gearing up although the liquidity crisis that followed made it difficult to get funding from local financial institutions. In 2009 the gearing ratio for RTG was 2%. RTGs gearing ratio was very low and induced very little credit risk to the shareholders. A low gearing ratio means that RTG has the scope to borrow more if there are any profitable ventures in the future and for their current refurbishment and expansion suffer at their AZambezi River Lodge unit and increasing the groups room 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 2 009 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. stakes 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 dividends were at risk. However 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 zillion Zimbabwean dollars per share and the earnings per share for 2007 was 253. 7 Zimbabwean dollars per share.Converting these figures to join States dollars at the unofficial 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 pe riods 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 Perspective Occupancy rates One of the main indicators of performance in the tourism industry is the line of work rate of hotels. RTG managed an occupancy rate of 44% in 2007 which was below the Zimbabwean tourism industry average occupancy rate of 45%. In the tourism industry the more customers are satisfied by your service the higher your occupancy rate will be. In 2008 the occupancy 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 count ry 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 soberly 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 rivals. 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 Government of discipline 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 brand management, better trade strategies and service excellence. RTGs higher occupancy rate means that it was more able to satisfy its cust omers 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 satisfied guests and large groups of organizations who hold seminars at RTGs hotels.Service lead time In 2009 RTG managed to tame its service lead time in its hotels to an average of 20 legal 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. give pedagogy 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 recorded 2700 complaints and the figure improved to 1100 in 2009 which was a 59% improvement. This improvement shows that RTG improved in satisfying its customers in 2009. Service whole tone RTG keeps books at all its hotels were customers are asked to write 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 Favorable 98% 96% 99% invidious 2% 4% 0. 9% Will 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 mainly 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 every time they take to tasked and hence the increase in complaints. The Accountant at RTG Mr G Nzunga explained that they made sure that their staff would explain the situation very carefully to the customers and extensive development of staff take cared 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 curb the number of complaints they were receiving from customers yearly. Learning and innovation RTG has invested heavily in the training of its staff in order to give better service to its cust omers. RTG has heart-to-heart a Hotel School for the training of its workers and other external students. The commitment of RTG to ceaselessly 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 losses and their occupancies are dropping.In an interview with the researcher Mr G Nzunga RTGs Accountant said that every worker at RTG attends at least 1 seminar every month in order to keep them abreast of changes and new ways of doing things. Interview review Question1 In the first question the researcher asked the operations director and the accountant of RTG what their financial and business objectives were. The resolutions can be summarized as follows * To be profitable and to create value for our shareholders. * To survive and grow in the long run thus protecting the interests of all our stakeholders. In 2008 the main objective was to survive in the harsh eco nomic climate in order to save the tourism industry and the Zimbabwean economy itself * To achieve service excellence in tourism and hospitality. Question 2 In question 2 the researcher asked the accountant of RTG how they measure their business and financial performance. In response he said RTG assesses its performance through traditional financial performance measures such as ratio analysis and trend analysis and other in advance(p) measures especially the balanced scorecard as they are equally concerned about the qualitative aspects of performance.Question 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 calculated from 2007 to 2009 financial statements. They gave various 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 outlined the following as some of the strategies they implemented * Employing an aggressive working capital strategy to mitigate the liquidity and operable challenges they were facing * Investing in money markets rather 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 prevailing as a result of price contro ls 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 downfall would have surely resulted in the collapse 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 improving working capital.They also stressed the need to labor and restore the image of Zimbabwe as a tourist destination. Conclusion The researcher found out that RTG uses both financial and non-financial performanc e 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 economic 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 instead of its core operational activities and shifting their attention 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 unavailability of inflation adjusted figures for the right analysis of financial ratios and trend analysis which might have given a false picture.The researcher held interviews with only 2 members of the executive management team which might have given a narrow picture of RTGs performance. Interviewing all members of the management and the board would have given the researcher a broader understanding of the business and financial performance of RTG, but time and 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 perhaps 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 severely 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.