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

  2018   2017  
Gaming        
  • Rewards club membership contribution to gaming revenue
77%   76%  
  • Guest satisfaction - gaming
77%   77%  
  • Slot machine average age
5.5 years   5.4 years  
Hotels        
  • Rewards club membership contribution to hotel revenue
33%   30%  
  • Guest satisfaction – hotels
88%   88%  
  • 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 R675 million   R925 million  

2018 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 gaming 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 5.5 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 during 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 R1.3 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, governance process and all decision-making forms part of a coordinated and integrated process across relevant business functions. All strategies and decisions are developed in a collaborative manner with the business and are based on the demands of the industry within which we operate. In most areas we continue to utilise third-party packaged solutions which are industry-specific, but have also developed numerous in-house applications and integrations to differentiate our service offerings. 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. Due to continuous and responsible IT investment over the past few years there are no legacy system issues. Our systems remain current and are all fully supported by relevant vendors and/or in-house staff.

During the 2018 financial year a cloud property management system and booking engine were trialled within the SUN1 portfolio. This solution enables far more integrated and simplified management and lends itself very well to their limited onsite staff complement. The results are encouraging and the solution will be deployed to all SUN1 hotels. The digital platform continues to enable better customer engagement, relationship management and business management. The broadband Wi-Fi operating model and voice routing strategy have been remodelled to take advantage of cost-saving opportunities.

The group continued to make strides in the centralisation of other systems. Centrally hosting systems, either on premise or in the cloud, remains our preferred strategy and progress continues. Cloud opportunities within the casino management environment remain limited due to the high level of industry regulation. The hotels environment has seen some progress with existing vendors, but they are finding migrating to a cloud model challenging, and the commercial model is not yet viable. The group will increase the adoption of cloud solutions as and when these make sense.

The group remains active with all major vendors to ensure they remain relevant to our needs and those of our guests, and to protect our investment. We directly engage with these key suppliers, defining new requirements and determining priorities.

The processing and protection of all sensitive and personally identifiable information is a global priority, plus we will be challenged by threats posed by the cyber underworld. Our environment requires major emphasis on information security, privacy, security, data protection, resilience, reliability and compliance with all relevant regulations. While we have made significant progress in this area to match international standards and local requirements, focus on this will remain an ongoing priority.

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.

Tsogo Sun brand portfolio management

The balance of brand portfolio communication continues with the brand essence of 'creating great experiences' being the golden thread that has become synonymous with brand delivery within the Tsogo Sun family of brands.

The introduction of three service hallmarks that underpin brand delivery has enabled memorable experiences to support our product allowing for greater product differentiation. The service hallmarks are: be consistent, be present and have respect, and they align the organisation. The clear brand portfolio enables ease of decision-making in operations, particularly when considering the introduction of new brands.

The incorporation of the increasing digital mix into all marketing campaigns results in a greater return on investment and the messages across channels are becoming more integrated, resulting in seamless, targeted communication to the customer.

The investment in the sunburst symbol continues to pay off with high recognition and recall from the group's stakeholders.

Customer satisfaction

The dynamic environment in which the group operates has resulted in a shift in the way in which brand reputation is managed. The group has welcomed the increase in customer interaction on digital platforms and has formalised a way of monitoring and managing online conversations.

The management of post-visit surveys continues and the data gathered via this platform has allowed the business to gain deeper insights into understanding customer preferences and behaviour. Analysing the data has provided the business with valuable information around the hotel booking engine and how customers transact, our food and beverage delivery, the group's rewards programme and customer behaviour pertaining to Wi-Fi.

The post-visit surveys continue to consistently provide feedback from approximately 10 000 guests per month. Low scoring statements are identified as burning issues and specialist project groups address them as a business priority. The overall satisfaction score for hotels averaged 88% (2017: 88%) and 77% (2017: 77%) for gaming. Overall satisfaction score for online third-party review sites for hotels was 85% (2017: 85%), and for gaming 83% (2017: 84%).

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

  • tsogosun.com – 1.1 million+ visits per month (2017: 1 million+);
  • Facebook – 1.87 million followers (2017: 1.65 million);
  • Twitter – 94 800 followers (2017: 78 400); and
  • Instagram – 28 500 followers (2017: 25 200).

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.

During the year the focus areas were on the growth in rewards membership, database hygiene, data profiling for the hotel rewards programme, bonus SunRands and e-vouchers for tactical, revenue-driving promotions and the targeted use of custom audience matches via digital media platforms.

Tsogo Sun gaming – rewards programme segmental analysis

Tsogo Sun gaming had 421 792 active gaming cardholders during the year. The contribution to total gaming revenue for the year from active members of the reward programme was 77%.

Segment 2018
% active
customers
  2018
contribution
%
  2017
% active
customers
  2017
contribution
%
 
Black 8   53   8   51  
Platinum 12   15   14   15  
Gold 80   9   78   10  
  100   77   100   76  

Tsogo Sun hotels – rewards programme segmental analysis

Tsogo Sun hotels had 130 387 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 2018
% active
customers
  2018
contribution
%*
  2017
% active
customers
  2017
contribution
%*
 
Black 6   10   5   9  
Platinum 14   9   14   8  
Gold 80   14   81   13  
  100   33   100   30  

* Systemwide

Customer safety

Tsogo Sun recognises that the health, safety and wellbeing of customers and employees are 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 micro-biological quality. No significant issues were noted.

LOOKING AHEAD

Customer rewards programmes

Database growth, repeat visits and incremental spend will be a core focus with the medium-term goal of rewards attaining a contribution of 40% to total hotels room revenue. Data profiling will also remain a priority to improve our understanding of customer behaviour and purchasing patterns. Key operational initiatives will play a role in maximising the programme for members, including rewards ambassadors and the identification and acknowledgment of key clients. Significance will continue to be placed on the protection of data and incorporation of local and international legislation and standards.

Information technology

During the 2019 financial year a broader range of new technology options will be trialled, including:

  • enhancing service delivery at the slot machine through interactive on-machine communication with players;
  • enrolling players at the slot machine, resulting in improved carded player tracking and rewards;
  • enabling players to utilise electronic host functionality on their mobile devices;
  • enabling the unlocking of PIN codes at the slot machine;
  • purchasing more attractive and modern cash dispensers;
  • deploying broadband Wi-Fi at our six larger casino properties covering the casino floor and key public areas;
  • delivering dashboards to staff on their mobile devices on the floor, enabling more effective management and an improved guest experience;
  • deploying on-premise kiosks at certain hotels to facilitate guest registration, check-in and collection of a room key. Further roll out will depend on utilisation;
  • improving the website guest experience and booking conversion rate, including the provision of live chat services and interactive messaging;
  • deploying an online ticket booking system for the Gold Reef City Theme Park; and
  • enhancing the online booking experience for Movies@ customers.