Latest Online Gambling & Casino News South Africa

Last week, Tsogo Sun Hotels released its latest financial results, showing that it was on an upward trend in trading for the period until the end of March 2022.

In the same update, Tsogo Sun Hotels, which separated its brand from the casino and hospitality giant, Tsogo Suns Holdings in 2019, said that it plans ‘rebrand’ back to Southern Sun.

Tsogo Sun Hotels became a Tsogo Sun Holdings brand at its launch in the early 2000’s. The objective of the empowerment-led venture, at the time, was to secure new casino licenses in South Africa.

Complete Split from Tsogo Gaming

Tsogo Sun Hotels CEO, Marcel von Aulock confirmed to MoneyWeb.co.za on Thursday, that the group was splitting completely from Tsogo Gaming which means that it will not be operating the operating the hotels with casinos anymore.

“When we separated out of the bigger group, we had a discussion at the time and we said, look, it can’t be that we split the casinos up and take the hotels physically into the hotel business, because you’ve got to run those casino complexes as a complex,” said von Aulock.

“We had a management agreement over the hotels at the casinos, which was an in-perpetuity thing, and we unbundled that.”

“Gaming assessors said they’d rather run them in-house very much, as I say, like Sun International and Peermont do, because in the split we’d put these in perpetuity management contracts in place, and that’s what we’d given hotel shareholders. They have to buy us out of those contracts. So, we get about R400 million to terminate the contracts.”

The CEO added that Tsogo Sun Hotels intends keeping two hotels in Nelspruit in its portfolio since they are important for the group’s distribution in the area. Since these hotels don’t do much casino business, Tsogo Sun Hotels will buy them back from Tsogo Sun Gaming form R140 million.

“Then there’s almost no connection between ourselves and the gaming company,” he said.

Not Yet Reached Pre-Covid Levels

In its financial results released on Thursday, Tsogo Sun Hotels said that while its trading is on an upward trend, it has still not recovered to pre-Covid levels.

Full year hotel occupancy came in at 30.6% (compared to 12.2% in the previous year). The financial statement said that the group was “acutely aware” that it was still trading at occupancies significantly below the group’s long-term average.

Tsogo Sun Hotels still faces several challenges, reads the statement, the most recent being the war in Ukraine, the flooding in KwaZulu-Natal and the fifth Covid-19 wave.

The company has limited exposure to the Eastern Bloc markets when it comes to revenue generation, however the war’s impact on global food and fuel prices has negatively affected the group and its guests.

“With travel budgets reduced to save costs and individuals preserving disposable income in a rising interest rate environment, the increasing cost of transport due to rising fuel prices is a major travel deterrent, particularly for international and corporate travel which are the two segments missing from the group’s recovery to pre-Covid levels,” read the statement.