Rebound of Tsogo Sun Hotels in a big name change to Southern Sun

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Tsogo Sun Hotels, which spun off from casino and hospitality giant Tsogo Sun Holdings in 2019 before the Covid fallout, is enjoying a strong rebound and has taken the opportunity to rebrand itself ‘back’ to Southern Sun.

The group publishes its latest financial results today (Thursday) and is expected to confirm a strong rebound for the fiscal year ending March 31, 2022, as highlighted in a business update last week.

He advised shareholders that revenue is expected to be R1.41 billion to R1.68 billion higher compared to previous comparative revenue of just over R1.16 billion.

“Ebitdar [Earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs] is expected to be R738-797 million higher than the previous comparative period Ebitdar loss of R177 million,” he said.

While this represents a major turnaround for the group following the pandemic-related financial fallout in the tourism and hospitality industry in 2020, it still recorded a loss. However, the losses were reduced by a wide margin.

“Overall loss per share is expected to be between 7.5 cents and 8.9 cents [an improvement of between 86% and 88%) compared to the prior comparative period [loss of 63.5 cents per share]“, he noted.

Tsogo Sun Hotels also announced in the update that it intends to change the company name to Southern Sun.

It appears to be a done deal, however, with Southern Sun’s name already listed on the band’s website.

“Follow the sun and rediscover Southern Sun, the new name of Tsogo Sun Hotels,” he said in a pop-up note on the site.

This rebranding is a significant return to its roots, with the Southern Sun brand having been a major name in the South African hospitality and tourism market for over two decades.

It became a brand of Tsogo Sun Holdings, which was launched in the early 2000s as a business focused on empowerment to secure new urban casino licenses in the country.

The group, which is now SA’s largest hotel company following its full acquisition of Hospitality Property Fund during the pandemic, has a history dating back to the mid-1960s when top hotelier, the late Sol Kerzner, opened the Beverly Hotel Hills in Umhlanga, north of Durban.

The Beverly Hills Hotel, still part of the group as the oldest hotel, opened in 1964, ostensibly as SA’s first five-star hotel.

Kerzner, with the backing of South African Breweries (SAB), played a huge role in the group’s growth across the country in the 1970s and 80s, opening iconic hotels like the Maharani, Elangeni, Sandton Sun and Cape Sun. He left the group in the 1990s before its subsequent incorporation into Tsogo.

Tsogo Sun Hotels, which now operates as Southern Sun, has clearly taken advantage of the Covid dip to reposition itself for growth. This comes with not only full control of the old HPF portfolio, but also several new transactions, including the conversion of hotels that were under other international brands to hotels under the group’s own brands.

These include The Edward Hotel in Durban, Mount Grace in Magaliesberg, and more recently the ???? in Cape Town, all of which were managed by Marriot International following its takeover of Protea Hotels several years ago.

The group has also obtained a management agreement to operate the ??? in Stellanbosch.

Just yesterday (Wednesday), Liberty Two Degree (L2D), which jointly owns the Sandton Convention Center and three hotels around Sandton City with Liberty Group, confirmed in a pre-closing update that the hotel Intercontinental in the compound is rebranded Sandton Towers and will reopen on July 1.

Renowned hotel group Southern Sun will manage the property for L2D, along with the two other hotels it also operates for the listed real estate counter – Sandton Sun and Garden Court Sandton.

While Tsogo/Southern Sun Hotels has management ties to some of Intercontinental Hotel Group’s UK hotels in South Africa, the rebranding of Intercontinental Sandton to Sandton Towers means that this property now becomes one of the luxury goods managed more directly by Southern Sun.

More details on the performance of the Tsogo Sun Hotels group and the rebranding to Southern Sun are expected to be revealed by the group’s CEO, Marcel von Aulock, on Thursday when releasing the company’s latest annual results.

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