The Chief Executive Officer of Tsogo Sun, Marcel von Aulock believes that the South African economy is set to turn and, when it does, the country’s largest hotel and casino operators will be well placed in the market.
“It might take longer than we think, but the economy will turn,” predicts von Aulock.
According to an article that appeared in The Sunday Times, the company operates its Southern Sun, InterContinental and Garden Court brands in seven different African countries. Tsogo Sun has continued to make sound investments in recent years, despite challenging economic conditions, believing that when things improve they will be ready to meet the demand.
In 2013, Tsogo Sun paid $30 million on an expansion on a property in Maputo, Mozambique, while investing another $70 million for a Nigerian hotel acquisition. A year earlier, the group purchased the entire stake in the Formula One chain, paying R300 million to Accor for the right to rename the chain Sun1.
Tsogo Sun has also upgraded one of its flagship properties, Gold Reef City, spending an impressive R630 million. Also in South Africa, the group revamped its Elangeni and Maharani properties in Durban, and has committed to a R1.8 billion expansion of the Suncoast complex. Besides revamping an Abu Dhabi hotel in April 2014, Tsogo Sun will spend another R560 million on expansions plan for its Silverstar Casino in Mulderdrift.
The Sunday Times compared the strategies of Tsogo Sun with its industry rival, Sun International, which owns 27 hotels and casinos in the same region. Sun International has its eye on expansion outside of Africa, and is focusing on Latin America. It plans on opening a casino in Panama and owns the Monticello Casino in Chile.
Sun International properties are mainly four and five star hotels and “are more resort-oriented than Tsogo”, according to the newspaper. Sun International is also tapping into the fast growing South African sports betting market, launching SunBet for local gamblers.
Sun International is also planning on a R3 billion investment after relocating its Morula license from Mabopane to Menlyn. The group has already applied for permission to do so, but has been met by opposition from a number of interest groups. The issue is still being debated as hearings continue.Read more about this artice here.