In its 2024 results, Southern Sun has reported growth in adjusted headline earnings per share of 88% (to 56.4c per share), along with EBITDAR (earnings before interest, income, tax, depreciation, amortisation, rent, long-term incentives and exceptional items) of R1.9 billion (€94.9m), a 32% increase over last year.
Revenue grew by a record 19%.
“Our significant exposure to the Western Cape, and Cape Town specifically, which enjoyed a strong tourism, business travel and event-related year, contributed to revenue growth,” said Southern Sun CEO, Marcel von Aulock.
Demand from local and international travellers for conferencing and events was recovering, as the group's occupancy rate increased by 7.1 percentage points compared with March 2023. However, occupancy remains 0.7 percentage points below the pre-pandemic results of 59.3% in March 2020.
Speaking to Tourism Update, Von Aulock said the group aimed for occupancy in the mid 60% range, and the lower than desired occupancy was a symptom of the South African economy’s performance.
“Government and corporate travel are not where they should be. We’re at around 75% of pre-COVID levels.”
He said the country needed to get the “big stuff” working.
“The government needs to get the basics right. South Africa’s 0.3% growth rate is just not enough. We need policy certainty, we need to stop making mistakes, and we need secure power – loadshedding destroys confidence.” He listed safety as another deterrent to foreign investment.
Although South Africa continued to benefit from strong international demand, this could be even stronger with the removal of visa restrictions on some markets and further activation of inbound air capacity to the country.
Observing that the results had been achieved even though the middle-income international traveller market had not recovered to pre-Covid-19 levels, Von Aulock said there was still an opportunity, noting that the high levels of operational gearing in the business had resulted in a substantial flow through to EBITDAR, even at reasonable revenue growth.
