Sun International: Surviving in New COVID-19 Reality
The chief executive officer of the South African casino and hospitality group, Sun International, has spoken out about how the company will perform in a reality affected by novel coronavirus.
Anthony Leeming described ways that Sun International will deal with the crisis, and how the pandemic will affect the future of the company.
Sun International has been under immense strain due to the closure of its casinos, resorts and hotels during lockdown. But even before the pandemic, the industry itself had been badly hit by external factors. As a result, Sun International’s share prices declined 86% over the past five years.
It’s important to note that it wasn’t only Sun International’s shares that performed so badly. Rival Tsogo Sun also saw a decline of over 80% in the same time period.
Last Friday, Sun International announced a R1.2 billion rights issue, although analysts believe that the group should have raised more.
Before the pandemic hit in March this year, Sun International was feeling hopeful that it had turned a difficult corner with its flagship property, Sun City.
“Even before the pandemic and lockdown we had started looking at a potential restructure of Sun City and the closure of Naledi (in the Free State) and Carousel (in North West),” said Sun International CEO, Anthony Leeming. “Yes, the pandemic will have a short-term impact on Sun City and Sun International. We might have to cut up to about 1 200 jobs at Sun City and another 600 hundred jobs at our other resorts and hotels. Even before the pandemic there was an element of over-staffing at Sun City anyway.”
Nontheless, Leeming foresees a tough year ahead for Sun City.
“We are not mothballing Sun City but rather using this time for care and maintenance…we are working to improve our guest offering and service,” he said.
“At some point people are going to want to get away again – even if it is only in about 6 to 8 months’ time – and Sun City is well positioned to fulfil that need again. And here will be world standard hygiene protocols in place.”
Leeming is optimistic that Sun International will be able to ride the wave of the pandemic, especially if restaurants and casinos are allowed to reopen on July 1st. Technically, they still remain shut, but the tourism industry is hopeful that the government will change its mind and allow such facilities to open up with strict hygiene protocols under Level 3.