Tsogo Sun Hotels



          as at 31 March 2016              
          Owned/leased       Managed       Total       Group revenue
contribution %
contribution %
          Hotels   Rooms       Hotels   Rooms       Hotels   Rooms          
  Deluxe       3   410       3   703       6   1 113       2   1  
  Premier       26   5 322       4   854       30   6 176       11   8  
  Economy       22   3 930       4   847       26   4 777       8   8  
  Budget       22   1 661               22   1 661       1   2  
  South Africa       73   11 323       11   2 404       84   13 727       22   20  
  Offshore       7   1 052       2   483       9   1 535       6   4  
  Total F'16       80   12 375       13   2 887       93   15 262       28   24  
  Total F'15       79   11 786       13   2 887       92   14 673       27   22  

Note: Excludes Redefine BDL and International Hotel Group portfolios and includes only hotels operated and managed by the group directly

Key features

Tsogo Sun hotels does not follow the prevalent international trend of operating the business on an 'asset light' basis, and in South Africa, the portfolio philosophy remains to majority own all the components of the business, wherever possible. The components of the hotel business are land, buildings, operations, management and brand. Although this portfolio philosophy is more capital intensive than the 'asset light' model, it allows substantially higher return on effort and in the long term retains control of the assets providing security of tenure and resilience through trading cycles.

The group leases assets both in South Africa and offshore where it is not possible to own the land and buildings, but then loses the growth of the property value over time. 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, but in the longer term it would be preferable to own the operation and the property. 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.


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Tsogo Sun hotels