Business

How much Southern Sun’s Sandton juggernaut makes in a month

Bianke Neethling • 21 May 2025

Hotel giant Southern Sun’s Sandton Consortium, which includes the Sandton Sun and Towers Complex, makes around R55.25 million a month in revenue, and earnings of around R17.58 million.

Southern Sun is Southern Africa’s largest hospitality group, operating 90 hotels in all market sectors across South Africa, Africa, the Seychelles, and the Middle East.

However, the company’s most notable asset is the Sandton Consortium, which encompasses the Sandton Sun and Towers complex and the Garden Court Sandton City, along with management fee income earned from the Sandton Convention Centre.

Southern Sun recently released its results for the year ended 31 March 2025, which gave investors a look at the performance of this Sandton powerhouse.

On a group level, Southern Sun reported strong results, with total income increasing by 9% to R6.6 billion.

This increase was supported by strong growth in rooms revenue, which rose by 10% to R4.4 billion, growth in average room rate (ARR), which increased by 5%, and an increase in occupancy of 2.2 percentage points to 60.8%.

The company’s food and beverage revenue was up 6% to R1.6 billion in line with occupancy growth, while property rental income grew by 19% to R272 million. Other revenue increased by 7% to R330 million.

Overall, the group managed to keep costs under control, with operating costs increasing by 7% compared to the prior comparative period.

Unfortunately, the company said that, while the suspension of load-shedding saved it R36 million on diesel, this was offset by a R37 million increase in electricity costs, mainly due to tariff increases.

However, the group’s operational gearing is reflected in the 9% increase in total income, converting to a 14% increase in Ebitdar (Earnings Before Interest, Taxes, Depreciation, Amortisation, and Rent) to R2.2 billion.

This equates to an Ebitdar margin of 33% compared to 31% for the prior year.

Gauteng, Western Cape and KwaZulu-Natal performance

The group’s income from Gauteng for the year through March 2025 amounted to revenue of R1.6 billion, up 19% from 2024, and Ebitdar of R491 million, up 35%.

The company also recorded strong growth in its Western Cape segment, which reported revenue growth of 17% to R2.3 billion and Ebitdar growth of 26% to R1.1 billion.

This region contributed 49% to Southern Sun’s overall group Ebitdar for the year ended 31 March 2025.

The company explained that this strong growth is largely due to Cape Town’s benefit from foreign inbound travel and large-scale conferences and events across all segments.

This boosted demand for accommodation and drove both volume and rate growth in the region.

Unfortunately, the company reported that KwaZulu-Natal was a drag on its performance, as this segment recorded declines in both revenue and Ebitdar.

Contributions from KwaZulu-Natal were revenue of R997 million, down 4% from the prior year, and Ebitdar of R247 million, a decline of 18%.

The company explained that its hotels located on the Durban beachfront are geared towards groups and transient business from corporates, including sporting bodies and the government.

It said demand from these segments slowed in the lead-up to, and immediately post, the national elections in May 2024 and again recently, following the delayed approval of the national budget.

“Infrastructure and safety concerns have impacted Durban’s desirability as a tourist destination. However, there have been positive steps made towards correcting this perception,” the company said.

“Umhlanga continues to perform well and, as a key growth node to the group, opportunities to increase its room stock in the region are continuously evaluated”

Sandton’s performance

The group’s Sandton consortium did not perform as well as expected, with revenue growth of less than 1%.

This segment generated revenue of R663 million, compared to R661 million in the 2024 financial year, an increase of 0.3%.

It reported a slightly higher increase in Ebitdar, which grew by 0.95% from R209 million to R211 million.

The company explained that this marginal growth in revenue and Ebitdar is due to the non-recurrence of the BRICS Summit, which took place in October 2024.

The closure of Sandton Towers for a full bedroom, corridor and lobby refurbishment, which was completed in December 2024, also subdued this segment’s growth.

The company said domestic and international corporate transient travel segments have recovered well over the year.

This recovery translated into increased demand for conferencing and events, bolstering hotels in prime business hubs near OR Tambo International Airport and the Sandton Convention Centre.

“By leveraging our relationships with sporting bodies, corporates and government and with a refurbished restaurant and bedrooms, the Southern Sun Sandton has gained traction in the market and trading levels have significantly improved,” it said.

The Sandton Consortium’s full-year revenue of R661 million translates into monthly revenue of R55.25 million a month, and its Ebitdar of R211 million means monthly earnings of R17.58 million.

It should be noted that this does not mean the consortium generates this much each month, as seasonality and big events could translate to more revenue in one month compared to another.

Rather, these figures reflect the yearly income spread across the twelve-month reporting period.