South Africa’s biggest hotel group is firing on all cylinders

Southern Sun expects its headline earnings for the first half of the 2027 financial year to rise by as much as 44%.

There were many factors working in Southern Sun’s favour over this six-month period, including a 67% reduction in its finance costs, higher occupancy, and an increase in room rates.

Southern Sun outlined these factors and its expected earnings growth in a trading statement on Thursday, 12 November.

Southern Sun is South Africa’s largest hospitality group, operating 95 hotels and resorts across South Africa, Africa, the Seychelles, and the Middle East.

Its portfolio comprises well-known hospitality properties such as Arabella Hotel, Golf & Spa; the Beverly Hills in uMhlanga; Mount Grace Hotel & Spa; and the Sandton Sun & Towers.

For the six months through September 2026, Southern Sun expects its earnings per share (EPS) to rise by between 31% and 39%.

Its headline earnings per share (HEPS) are expected to grow by 35% to 44%, with adjusted HEPS up 35% to 43%.

Over the six-month period, Southern Sun’s occupancy increased from 59.1% to 61.8%, while average room rates increased by 9%. 

The group said this resulted in revenue growth of 12%, comprising 10% growth in the South African portfolio and 55% from the offshore segment.

Its operating expenses grew slightly more slowly, at 8%, with the group saying it faced above-inflation cost pressures.

It incurred higher costs for information technology, utilities, property rates, and online travel agent commissions.

However, Southern Sun’s net finance costs decreased by 67% over the period following the settlement of its US dollar-denominated debt. Stronger cash generation also played a role.

These strong half-year results show that Southern Sun continued building on the momentum from its 2026 financial year.

For FY26, Southern Sun reported a 9% increase in total income to R7.2 billion, with adjusted HEPS up 19% to 90.1 cents.

Southern Sun will release its results for the first half of the 2027 financial year on Wednesday, 18 November 2026.