Southern Sun reported yesterday that trading volumes in South Africa have continued to improve in the first five months of the financial year ending March 31, 2024, boosted by Netball World Cup 2023 and the 2023 BRICS Summit.
The Netball World Cup 2023 was hosted in Cape Town from July 28 to August 6, while the 2023 BRICS Summit was held in Johannesburg form August 22-24.
In a statement, the group, formerly known as Tsogo Sun Hotels, said occupancy was at 55.3% for the five months ending August 2023, has increased by 2% points compared to 44.2% in the prior comparative period, and is only 2% points below the 57.2% achieved for the same five-month period in 2019, being pre Covid-19.
“The group’s average room rate has increased by 13% for the five months ending August 2023, compared to the prior comparative period and by an encouraging 26% compared to the same five-month period in 2019.
“The improvement over the pre-Covid-19 period is achieved through a combination of higher achieved yielding and a change in the mix of hotels with the consolidation of several previously 3rd party leased properties,” it said.
According to the group, improved trading has been particularly prevalent in the Western Cape, which has enjoyed several large events hosted at the Cape Town International Convention Centre such as the recent Netball World Cup.
“In Gauteng, the group proudly hosted the 15th BRICS summit in August 2023 at the Sandton Convention Centre, which led to substantial demand for accommodation at the surrounding hotels. In addition, most regions have seen good transient demand, with a substantial portion of the Group’s hotels trading above pre-Covid-19 levels.”
Southern Sun said hotels in the Sandton and Rosebank nodes and the group’s budget offering, Sun1, had not fully recovered, but were showing improvement as the year progresses.
“Hotels in Maputo and Lusaka in the Group’s offshore division have not traded in line with expectations and are impacted by developments or lack thereof, in the oil and gas sectors and other mining activities, while Paradise Sun in the Seychelles has performed in line with expectations in the five months.
“Results from the group’s associate companies in the United Kingdom have been encouraging with trading and profitability being above pre-Covid levels. The group has continued to maintain good cost controls, with specific focus on ensuring that the significant savings achieved through the restructuring during the Covid-19 period are not lost,” it said.
Southern Sun said as previously announced, an additional 89 million shares were bought back in May and June, which, together with shares acquired in the prior financial year, has reduced the overall shares in issue net of treasury shares by just more than 100 million shares or 6.7%.
“The group is encouraged by these results and indications are for a strong summer tourism season, but remains cautious as the challenges of load shedding, fiscal constraints on government, and the overall poor state of the South African economy continue.
“Traditionally, the majority of the group’s profits are earned in the second half of the financial year,” the group said.
BUSINESS REPORT