JSE-listed hospitality groups are banking on the upcoming Group of Twenty (G20) summit in Johannesburg to inject fresh momentum into a sector still grappling with uneven recovery and mounting challenges.
The high-profile event scheduled for November 22-23 marks the first G20 gathering on African soil. Seen as a potential turning point for the tourism and hospitality industry, it is expected to draw high-level international delegations, stimulate government travel and cast a global spotlight on SA’s travel and hospitality infrastructure.
“The upcoming G20 summit later this year and associated events and activities are all expected to have a positive impact on consumer and business confidence, spending and elevated investor interest in SA,” City Lodge said in its recent results.
Southern Sun, Sun International, Tsogo Sun, and City Lodge have made varying strides since the pandemic, but they continue to face challenges such as slower government and business travel, infrastructure bottlenecks, regulatory uncertainty and intensified competition.
Southern Sun has emerged as the strongest performer in the JSE’s hotel and hospitality sector over the past year, with its share price surging 71%. The group is now valued at R12.4bn.
For the year to end-March, income rose 9% to R6.6bn, boosted by strong demand in the Western Cape and Gauteng. Adjusted headline earnings per share (HEPS) increased 34% and dividends doubled to 25c per share.
However, operations in KwaZulu-Natal and Mozambique were hindered by infrastructure issues and political instability, while government and corporate travel remained subdued in certain regions.
Visa boon
“It was encouraging to see that room rates remained strong during 2024, despite the slower recovery in demand post elections,” the company said, adding that simplified visa processes for Chinese and Indian travellers could further boost inbound demand.
The Sun International share price has risen 11% in the past 12 months, giving it a market capitalisation of R10.68bn. It is, however, down 4.9% so far this year at R41.37.
In the year to end-December Sun’s adjusted earnings before interest, tax, depreciation and amortisation (ebitda) rose 3% with share buybacks for the year amounting to R141m.
Its online betting platform, Sunbet, was the standout performer, growing 60.6% year on year and now contributing more than 60% of gross gambling revenue.
“The growth in online betting has far surpassed the growth in casinos and other forms of gaming in the past year,” the company said. It is now focused on enhancing its omnichannel strategy, VIP offerings and digital activations.
In contrast, Tsogo Sun has faced headwinds, with its share price down 22.25% so far this year.
For the year to end-March, revenue dipped slightly to R11.2bn, ebitda was down 11% while HEPS fell 16% to 142c. The final dividend was reduced to 30c from 40c.
The group blamed regulatory delays in the Western Cape for its challenges, noting that a competitor controls about 81% of the province’s casino revenue. Planned investments in the Helderberg and Overberg regions remain stalled.
City Lodge’s share price is down 19.4% in 2025, after rising markedly in the first six months after the formation of the government of national unity. The company is yet to release its full-year results.
Positive outlook
Despite ongoing challenges, Africa’s hospitality industry has a positive outlook. Statista projects the continent’s travel & tourism market will generate $25.16bn in 2025, growing at 7.45% annually to reach $33.54bn by 2029.
SA remains a key player, with its market expected to reach $2.53bn in 2025 and grow to $3.19bn by 2029. Hotels are projected to contribute $1.21bn in 2025.
Margaret Peters, events manager at DMG Events, said the continent’s hospitality sector was evolving rapidly, driven by new developments in countries such as Egypt, Morocco, Nigeria and Kenya. International chains such as Marriott and Hilton were expanding aggressively.
She pointed to the rise of “bleisure” travel, combining business and leisure, as a defining trend.
SA, particularly Cape Town, remained a prime destination for hospitality investment. But staffing shortages and inflation remained key constraints.
Peters said future success depended on partnerships that blended local culture, food and wellness to deliver authentic, immersive guest experiences.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.