Rebounding Tsogo Sun Hotels in big rebrand back to Southern Sun

Tsogo Sun Hotels, which unbundled from casino and hospitality giant Tsogo Sun Holdings in 2019 prior to the Covid fallout, is seeing a strong rebound and has taken the opportunity to rebrand ‘back’ to Southern Sun.

The group releases its latest financial results today (Thursday) and is set to confirm a strong rebound for the year ended 31 March 2022, as highlighted in a trading update last week.

It advised shareholders that revenue is expected to be between R1.41 billion and R1.68 billion higher when compared to the prior comparative full-year revenue of just over R1.16 billion

“Ebitdar [Earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs] is expected to be between R738 million and R797 million higher compared to the prior comparative period Ebitdar loss of R177 million,” it said.

While this represents a major turnaround for the group following the pandemic-linked financial fallout in the tourism and hospitality industry in 2020, it still reported a loss. However, the losses have been slashed by a wide margin.

“Headline loss per share is expected to be between 7.5 cents and 8.9 cents [an improvement of between 86% and 88%) compared to the prior comparative period [loss of 63.5 cents per share],” it noted.

Tsogo Sun Hotels also announced in the update that it intends to change the name of the company to Southern Sun.

This however seems to be a done deal, with the Southern Sun name already featuring on the group’s website.

“Follow the sun and rediscover Southern Sun, the new name of Tsogo Sun Hotels,” it declared in a pop-up note on the site.

This rebradning is a significant move back to its roots, with the Southern Sun brand being a major name in hotel and tourism market in SA for more than two decades.

It became a brand of Tsogo Sun Holdings, which was launched in the early 2000’s as an empowerment-led venture to secure new urban casino licences in the country.

The group, which is now SA’s largest hotel company following its full acquisition of Hospitality Property Fund during the pandemic, has a history going back to the mid 60’s when top hotelier, the late Sol Kerzner, opened the Beverly Hills Hotel in Umhlanga, north of Durban.

The Beverly Hills Hotel, which is still part of the group as its oldest hotel, opened in 1964 reportedly as SA’s first five-star hotel.

Kerzner, with the backing of South African Breweries (SAB), played a huge role in growing the group across the country in the 1970’s and 80’s, opening landmark hotels like the Maharani, Elangeni, Sandton Sun and Cape Sun. He exited the group in the 1990’s ahead of its later incorporation into Tsogo.

Tsogo Sun Hotels, now trading as Southern Sun, has clearly taken advantage of the Covid low to reposition itself for growth. This comes not only with its full control of the former HPF portfolio, but several new deals including the conversion of hotels that were under other international brands to now being under the group own brands.

These include the likes of The Edward Hotel in Durban, Mount Grace in Magaliesberg, and more recently the ???? in Cape Town, which all used to be managed by Marriot International following its takeover of Protea Hotels several years ago.

The group also secured a management agreement to operate the ??? in Stellenbosch.

Just yesterday (Wednesday) Liberty Two Degree (L2D), which jointly owns the Sandton Convention Centre and three hotels around Sandton City with Liberty Group, confirmed in a pre-close update that the Intercontinental Hotel in the precinct is being rebranded as Sandton Towers and will reopen on July 1.

The rebranded Southern Sun hotel group will manage the property for L2D, together with the other two hotels it also operates for the listed property counter – Sandton Sun and the Garden Court Sandton.

While Tsogo/Southern Sun Hotels has links to managing some of UK-based Intercontinental Hotel Group’s hotels in SA, the rebranding of Intercontinental Sandton to Sandton Towers means that this property now effectively becomes one of the luxury brands managed more directly by Southern Sun.

More details on the Tsogo Sun Hotels group performance and rebranding to Southern Sun are expected to be revealed by group CEO Marcel von Aulock on Thursday during the release of the company’s latest annual results.