INTEGRATED ANNUAL
REPORT 2020

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TSOGO SUN
THROUGH THE YEARS

Where it all began

1969

South African Breweries Limited (‘SAB Limited’) and hotelier, Sol Kerzner, partnered to create Southern Sun Hotels (‘Southern Sun’), the largest hotel group in the southern hemisphere at the time. Southern Sun commenced operations with six hotels, including the iconic Beverly Hills Hotel in Umhlanga Rocks, Durban, and was subsequently involved in the development of many of the most prestigious hotels of the era, including the Cape Sun, Sandton Sun and Sun City. Southern Sun expanded through the acquisition and development of hotels in South Africa and neighbouring countries, throughout the 1970s and early 1980s.

 

The casino interests of Southern Sun, including the newly built Sun City operations, were separated from its hotel business into what later became Sun International. Southern Sun retained the South African hotel operations during a difficult time for the hotel industry in South Africa as international sanctions against the apartheid government resulted in a severe contraction in demand.

1983

Southern Sun expanded to 26 hotels. It then acquired the Holiday Inn South Africa hotel group, thereby establishing a countrywide distribution of 49 hotels, in both the upmarket and mid-market segments.

1985
1991

Southern Sun was delisted from the JSE and became a wholly owned subsidiary of SAB Limited. Southern Sun entered into a joint venture with Accor SA, the French hotel group, to develop the Formula1 and Formula Inn range of hotels in South Africa and the first of 23 hotels opened the next year.

1994

The mid-1990s saw a rejuvenation for Southern Sun as the hotel business was transformed through the introduction of the successful ‘Jumbo Jet’ strategy, which changed the portfolio to concentrate on mid-market and economy hotels rather than deluxe products. This, combined with the opening of the South African economy after the end of apartheid, saw a dramatic increase in occupancy rates and profitability.

Southern Sun formed a joint venture with a consortium of B-BBEE investors to form Tsogo Sun, to pursue casino licence opportunities afforded through the enactment of the National Gambling Act which regulated gambling activities and promoted uniform standards in relation to gambling in South Africa. Early success saw the Tsogo Sun Group awarded casino licences in Mpumalanga (Emnotweni Casino in Mbombela and The Ridge Casino in Emalahleni) and most importantly the Montecasino licence in Fourways, Johannesburg. These were followed by the successful applications for Suncoast Casino in Durban and Hemingways Casino in East London.

The Tsogo Sun Group expanded its hotel operations into the rest of Africa.

1996
1999

Southern Sun acquired a 50% interest in a consortium with Liberty called The Cullinan which owned three hotels.

The Tsogo Sun Group entered into a landmark empowerment deal, through which the hotel and casino businesses were housed under one entity owned 51% by an empowerment consortium and 49% by SABMiller plc. Through a series of transactions and acquisitions, HCI acquired the various empowerment shareholders’ interests in Tsogo Sun and remains Tsogo Sun Hotels’ controlling shareholder.

 
2003
2009 – 2011

Tsogo Sun acquired Century Casinos’ operations in Caledon and Newcastle and in 2011 it acquired the Gold Reef Resorts portfolio, which consisted of seven casinos in South Africa, via a reverse listing.

2012 – 2014

Tsogo Sun acquired the remaining 53% of the joint venture owning and operating Formula1 hotels in South Africa from Accor SA and rebranded these hotels as SUN1 properties. This period also saw the group acquire an additional 10% interest in The Cullinan with that entity acquiring five hotels from Liberty that were previously managed by the Tsogo Sun Group, bringing the number of hotel properties in Cullinan to eight. In addition, Tsogo Sun acquired Southern Sun Hyde Park and The Grace in Rosebank (relaunched as 54 on Bath) hotels from Hyprop.

Offshore, Tsogo Sun acquired 75.5% of Ikoyi Hotels Limited which owns Southern Sun Ikoyi Hotel in Lagos, Nigeria, as well as a 25% interest in RBH Hotel Group Limited (‘RBH’), a leading hotel management company in the United Kingdom.

In July 2014, SABMiller plc exited from its long-term 39.6% shareholding in Tsogo Sun through a fully marketed secondary placement.



2015 – 2017

This period saw the acquisition of a controlling stake in Hospitality Property Fund Limited (‘Hospitality’), through the injection of 10 hotel properties into Hospitality in an asset-for-share transaction. This stake was increased in 2017 through the addition of 29 hotel properties to Hospitality for a combination of shares and cash.

Tsogo Sun also acquired 26% of International Hotel Properties Limited (‘IHPL’), a hotel-owning company in the United Kingdom.

The group celebrated its 50th anniversary and on 12 June 2019, the hotel business was unbundled by Tsogo Sun culminating in the separate listing of Tsogo Sun Hotels on the main board of the JSE.

2018 – 2019

COVID-19, which has swept across the globe resulted in the deactivation of the vast majority of the group’s hotels in order to protect the health of our guests and employees, a black swan event never before experienced in the group’s long history.

2020

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