The proposed split of the group into three listed businesses would result in Tsogo Sun hotels following the prevalent international trend of operating the business on an 'asset light' basis. In South Africa the portfolio philosophy would change to control the components of the business through secure lease tenures rather than majority ownership of the properties. The components of the hotel business are land, buildings, operations, management and brand.
In South Africa the group will only manage operations for third parties if they are strategically important (due to partner requirements or location) and where there is no option to own or lease. We will manage operations for third parties offshore as this is a low-risk option to enter new markets. We operate hotels as a franchisee where necessary due to brand differentiation requirements but we are not a franchisor of our own brands.
Tsogo Sun hotels' key differentiator in South Africa is our wide distribution of quality, budget through to luxury, hotel products. In addition to quality product, consistent exceptional guest experience remains the focus at all Tsogo Sun hotels to differentiate in an often commoditised industry.
The majority of Tsogo Sun hotels' occupancy depends on the business traveller, government and group and convention markets. Relationships with key customers and travel intermediaries, and access to the correct distribution networks, are critical in driving both occupancies and average room rates throughout the hotel division.
The customer rewards programme in the hotel division is important as 33% of hotel revenue is contributed by active reward club members.
9 37 United Kingdom
1 Nigeria Lagos
1 1 Zambia Lusaka
2 Mozambique Maputo and Tete
1 Tanzania Dar es Salaam
1 Kenya Nairobi
2 Seychelles Mahé and Praslin
1 UAE Abu Dhabi
|as at 31 March 2018||Group revenue
|Tsogo Sun operated||Hotels||Rooms||Hotels||Rooms||Hotels||Rooms|
|Full service||27||5 524||4||854||31||6 378||13||10|
|Select service||25||4 563||2||516||27||5 079||8||8|
|Budget||22||1 741||–||–||22||1 741||1||2|
|South Africa||77||12 238||9||2 065||86||14 303||24||21|
|Offshore||7||1 038||3||523||10||1 561||4||2|
|Total 2018||84||13 276||12||2 588||96||15 864||28||23|
|Total 2017||81||12 659||12||2 675||93||15 334||29||24|
|HPF owned||12||2 635||12||2 635||3||7|
|IHPL owned(1)||9||1 135||9||1 135|
|RBH managed(1)(2)||62||8 635||63||8 635|
|Total 2018||105||17 046||74||11 223||179||28 269||31||30|
|Total 2017||102||16 389||49||8 156||151||24 545||31||29|