Product relevance to customer experience

 

Tsogo Sun sells experiences including hospitality, gaming, dining and entertainment. To provide the variety and quality of experiences demanded by the group's various clientele at the appropriate price points, the group needs to constantly monitor and invest in:

  • physical product that caters to the customer - including hotel operating equipment, major and minor refurbishments to both hotel and entertainment complexes, gaming equipment, tenant allowances and mind and mood infrastructure to enhance customer experience;
  • technology that works for the customer and makes the product work - including gaming management systems to ensure optimal gaming floor utilisation, guest facing and back-of-house hospitality systems for in-house facilities and reservations, channel and customer relationship management;
  • accessibility that allows the customer to utilise the group's products with minimal barriers to entry - including physical facilities as simple as sufficient parking, accessibility for mobility-impaired guests, easy access to reservation systems and personnel for both trade and individual buyers and easy access to information on the group's products; and
  • branding which is critical to the way in which the group is viewed by its current and prospective customers.

Key performance indicators

  2016   2015  
Gaming        
  • Rewards club membership contribution to gaming revenue
75%   72%  
  • Guest satisfaction - gaming
77%   76%  
  • Slot machine average age
5.1 years   5.4 years  
Hotels      
  • Rewards club membership contribution to hotel revenue
33%   29%  
  • Guest satisfaction - hotels
87%   87%  
  • Hotel property brand audits
No material deviations from brand standards   No material deviations from brand standards  
Hygiene audits No significant issues noted   No significant issues noted  
Maintenance capital spend R945 million   R749 million  

2016 performance

Product relevance
In order for the group to deliver the hospitality, gaming, dining and entertainment experiences that our customers desire, it is important that our physical product and service delivery are relevant to our customers at appropriate price points, are consistent in standard and delivery, provide the variety of experiences that will encourage repeat visits and make it easy for our customers to do business with the group. Consumer expectations range from technology preferences to the look and feel of the physical product, the location of buildings, concepts for restaurants and bar offerings, types of entertainment and travel patterns.

The group seeks to respond dynamically to changing trends, refreshing casino and hotel offerings to reflect contemporary tastes and embracing new technologies that will improve customer experience. Therefore, we have committed to investing significantly in the regular maintenance and refurbishment of our properties in order to keep the experiences attractive and relevant to our customers. Slot machines are replaced on an approximate seven to 10-year cycle and the current average age of slot machines is 5.1 years.

Many of these machines, however, have been upgraded or have had game changes to ensure they remain relevant. Physical standards at hotel properties are evaluated through hotel property audits. We believe that our properties offer a superior experience to those of our peers and of other leisure activities. In order to preserve our market position and to attract existing and new customers to our gaming and hotel operations, we intend to continue our disciplined programme of investment to continually refresh the offerings and décor of our facilities. There were no material deviations from the relevant brand standards in the period under review.

Product development
Development of the casino and hotel real estate is a critical component of the group's business and its plans for organic growth. On average over the past five years, approximately R1.2 billion has been invested annually in the expansion, refurbishment and maintenance of the group's existing casinos and hotels, excluding the acquisition of new properties. The ability to develop and maintain relevant physical products is a key competency required in the business and the location selection, construction and ongoing property maintenance are the core skills required. Key personnel are employed on a permanent basis to deliver these core skills that safeguard and mentor this knowledge.

These skills are augmented by a network of experienced professionals that have worked with the business for a number of years but who are regularly supplemented with new professional firms with the objective of introducing change and fresh ideas to established methods, concepts and systems.

Information technology
Information technology strategy and governance are driven centrally with divisional teams delivering operational system-specific solutions to meet the business requirements. Both divisions predominantly utilise third-party packaged solutions which have been purpose built for the industry.

During the 2016 financial year, the upgrade of the gaming management systems to either IGT Advantage or Gamesmart was completed and the core hotel and casino management systems are now current and best of breed.

It remains our strategy to leverage off specialist application software providers and not to invest heavily in our own internally developed systems. We believe suppliers are, in general, better positioned to carry out research and development and keep pace with industry changes and the rapid evolution of technology. However, we position ourselves to actively influence application development direction through direct participation and collaborative design with our suppliers. This approach optimises our technology investment and reduces redundancy.

Our core technology differentiator remains the manner in which we utilise and integrate the relevant features of our systems to streamline and optimise our operations, enhance the customer experience and ensure Tsogo Sun is the easiest place to do business.

The group's website www.tsogosun.com was redeveloped to enable better search engine optimisation in order to better connect with our customers. A new booking engine has been launched during 2016 which will enable responsive mobile access and provide direct access to distribution aggregators (e.g. Trivago, TripAdvisor) and online travel companies (e.g. Expedia) thereby extending our booking channel reach. The website and booking engine are important tools in retaining control of the group's direct booking channels, which remains a core strength of the group.

Over the past two years rates management technology has been implemented throughout the hotel group to ensure the right rate is charged for the right room daily. This allows for flexibility of room rates and the optimisation of revenue in high demand periods.

Tsogo Sun brand portfolio management
The group has been diligent in its focus to build the Tsogo Sun master brand and has achieved strong recognition and recall within both the corporate and consumer markets in South Africa. This has enabled clear and consistent communication of the master brand, aligned with both the business objectives and the group's purpose to create great experiences for our guests.

A clear brand portfolio strategy is supported by structured brand management including the consistent application of Tsogo Sun's ‘sunburst' across properties and the select use of a common endorsement. These brand standards have become essential in ensuring that each of the brands in the group are aligned with the Tsogo Sun brand values. In this way each product brand continues to contribute to the growth of the Tsogo Sun master brand.

The group and hotel communication follows the Tsogo Sun master brand corporate identity whereas the casino properties communicate predominantly on that of the respective property corporate identity. This principle also applies to the group's reward programmes. This approach, supported by key Tsogo Sun sponsorships and partnerships, allows the master brand to remain the most prominent market facing brand, unified by the ‘sunburst'.

Group marketing focuses on retail messages with limited dedicated spend on pure brand communication. Over the past year, the group extended its marketing channel reach using digital platforms such as electronic mailers, display banners and social media. Digital campaigns are gaining more traction as they are targeted, measureable and seamless, have a faster turnaround time and are cost effective. The group's website tsogosun.com supports the digital strategy by serving as a perfect launch pad into digital applications.

Customer satisfaction
Understanding our guests makes it possible to offer them products and services that they want. Tracking levels of guest satisfaction is important to us as it allows us to interrogate feedback with the intention of delivering consistent experiences across the group. The group's purpose to ‘create great experiences' drives engagement as satisfied guests are directly correlated to great experiences, which in turn creates loyalty to our brands and properties.

Consistency of brand delivery is made possible by each brand operating according to a set of brand operating standards. These standards are audited annually at hotels and on an ad hoc basis at casinos. The audits are complemented by data obtained from feedback received from approximately 10 000 guests per month across the business via the eGuestSurv post-stay survey, as well as from third-party sites such as TripAdvisor.

The overall guest satisfaction for Tsogo Sun hotels averaged at 87% this year, in line with the prior year. The high guest satisfaction score at Tsogo Sun hotels is due to enhanced awareness of our guests' needs and our ability to respond to them efficiently and effectively. With all the casinos now having had a full financial year of receiving post-visit feedback, the overall satisfaction score has increased to 77% (F'15: 76%). The data gathered has enabled the casino and hotel operators to identify and further investigate key guest contact areas within the business to continue to create great experiences at every touchpoint.

Guest satisfaction correlates with the high levels of engagement across the various platforms:

  • tsogosun.com - 750 000+ visits per month
  • Facebook - 1.35 million followers
  • Twitter - 61 000 followers
  • Instagram - 16 300 followers

Customer rewards programmes
Tsogo Sun's hotel and casino rewards programme is designed to encourage relationships of mutual value with customers by giving benefits and rewards to cardholders. It provides the group with detailed information about trends across its customer base that enables Tsogo Sun to improve our offering in response to changing consumer behaviour and to meet the demands of top-tier active reward club members more effectively. While our gaming management systems do not allow for full portability of rewards and benefits, the rewards programme provides patrons with consistent card status levels, rewards and benefits across the group.

Tsogo Sun gaming - rewards programme segmental analysis
Tsogo Sun gaming had 316 695 active gaming cardholders during the year. The contribution to total gaming revenue for the year from active members of the reward programme was 75%.

Segment 2016
% active
customers
  2016
contribution
%
  2015
% active
customers
  2015
contribution
%
 
Black 8   50   8   46  
Platinum 14   16   15   15  
Gold 78   9   77   11  
  100   75   100   72  

Tsogo Sun hotels - rewards programme segmental analysis
Tsogo Sun hotels had 96 226 active reward cardholders during the year. The contribution to total hotel revenue for the year from active members of the reward programme was 33%.

Segment 2016
% active
customers
  2016
contribution
%*
  2015
% active
customers
  2015
contribution
%*
 
Black 5   9   5   7  
Platinum 13   10   16   7  
Gold 82   14   79   15  
  100   33   100   29  
* Systemwide

Customer safety
Tsogo Sun recognises that the health, safety and wellbeing of customers and employees is of paramount importance. Life safety equipment and procedures are maintained at high levels of quality and compliance at all our facilities. Compliance with best practice in life safety, health, hygiene and fire protection is a non-negotiable element of our management systems.

Each property undergoes rigorous safety inspections as part of the Organisational Resilience Management Standard audit process, and deviations from the agreed standards and incidents and events are reported and resolved.

All Tsogo Sun hotel, casino and restaurant properties, including outsourced restaurants, undergo an independent audit every second or third month, which covers food safety practices and compliance to the group standard, as well as legislated elements. Temperature control, personal hygiene, good manufacturing practices, product traceability and storage, cleaning programmes and pest control are included. Audits are strictly unannounced and include surface swabs, hand swabs and food samples, which are selected at random during the audits and assessed for microbiological quality. No significant issues were noted.

Looking ahead

Customer reward programmes
The focus for the next year will remain on using the customer information in the programmes in a targeted approach to influence behaviour and ultimately hotel and casino revenue. Using SunRands in hotels and Points in casinos, as well as a variety of entertainment and dining offers, customers will continue to be encouraged to maintain or increase their spend and frequency of visits to our hotels and casinos and relevant communication regarding the benefits of the programme is a priority.