Gaming and hospitality group Sun International has called on the government to make obtaining a travel visa to SA easier, saying the move would boost local tourism and the economy.
This is as the Johannesburg-based group has injected R530m into renovations at Sun City and bolstered its offerings to draw more travellers to the holiday resort.
Sun City GM Brett Hoppé said while the group had experienced an uptick in local travellers during the pandemic lockdowns, leveraging from the closed travel borders, onerous visa requirements were slowing the return of international guests to pre-Covid levels, particularly those from China.
“The Chinese market has as yet not returned to full steam and there’s still a massive opportunity for growth from that market,” Hoppé told Business Day. “Unfortunately, we’ve had major visa issues. For a Chinese national to obtain an SA visa in China is cumbersome, you have to go in person, then you have to return to collect the visa, so we don’t make it easy.”
Cost efficiencies achieved through the group restructuring during the Covid-19 period and strong demand for conferencing and events helped bolster the group’s earnings in the year to the end of March.
In addition, the exposure of the owned portfolio of hotels in the Western Cape, particularly in Cape Town, which has enjoyed strong tourism, business travel and events, were also a boost to earnings.
Group occupancy increased by 7.1 percentage points to 58.6%, aided by more normalised demand from local and international travellers and strong demand for conferencing and events. However, it was still 0.7 percentage points below the 59.3% achieved before Covid-19.
The more we can enable the ease and speed of visa processes across many markets, in particular China, it’s going to help boost tourism.
— Brett Hoppé, Sun City GM
This shortfall in occupancy is largely related to hotels in individual nodes in SA and offshore, which have not yet fully recovered but are showing signs of improvement and present a focus area for management, it said.
Overall occupancy at 58.6% reflects SA’s low-growth economic environment.
However, the group said it was optimistic that if there was certainty about government policy and private sector collaboration to solve the country’s challenges, the pent-up demand for travel and accommodation by both domestic and international corporates, as well as the government, should begin to materialise.
That would benefit the group’s hotels in Gauteng and KwaZulu-Natal, which were weighted towards these segments. SA continued to benefit from strong international demand in 2023 and the group said that could strengthen with the removal of visa restrictions to some markets and further activation of inbound air capacity to the country.
“Holiday decisions are governed by the ease of obtaining visas,” said Hoppé. “The more we can enable the ease and speed of visa processes across many markets, in particular China, it’s going to help boost tourism.”
However, the Indian market has returned strongly.
“We’ll see what happens with the new minister in the portfolio,” he said.
Leon Schreiber was last week named home affairs minister by President Cyril Ramaphosa in his government of national unity cabinet.
Sun International said the number of middle-income international travellers had not recovered to pre-Covid levels and represented an opportunity.
The company’s latest renovations at its Sun City resort include the installation of world-class padel courts, and upgrades to the Sun Vacation Club and the Sun City hotel, which are expected to be finished in 2026.
Meanwhile, the group has also made a play to acquire Emperors Palace owner Peermont Group for R7.3bn to expand its portfolio of gaming and hospitality assets, which would eventually raise earnings and cash flow generation of the group.
With its proximity to the OR Tambo International Airport, Emperors Palace — one of the largest, most cash-generative, high-quality casinos situated in a major metropolitan area — offers a gateway to high net worth customers from the rest of Africa and abroad.
Sun International, which has a market capitalisation of R9.8bn on the JSE, said this customer base would drive opportunities for synergies with the rest of the group’s operations, including hotels and resorts, as well as the online sports and gaming business, creating large-scale benefits for Sun International.
The proposed acquisition would also further enhance the group’s online business platform with opportunities for growth by extending Sun International’s proven SunBet management team’s reach across the Peermont Group’s assets.
Apart from Sun City, the group also owns Meropa Casino, Table Bay Hotel, the Wild Coast Sun and The Maslow Hotel.
Sun International shares closed 1.32% lower at R38 on Friday, having climbed over 12% in the last year.
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