Western Cape coming for Gauteng’s crown

Southern Sun’s latest interim results showed that the Western Cape is experiencing significantly faster growth than Gauteng, although the upcoming G20 and B20 conferences are set to boost South Africa’s richest province.

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

While the company operates in countries across the world, its South African operations remain the most lucrative, accounting for the lion’s share of Southern Sun’s revenue.

Within these South African operations, the Western Cape and Gauteng are the biggest drivers of revenue growth.

One of the company’s most notable assets in Gauteng 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.

In the Western Cape, the company operates The Cullinan and hotels at the Waterfront, City Bowl and Nelson Mandela Boulevard, among many others.

On Wednesday, 19 November, Southern Sun released its interim results for the six months ended 30 September 2025, marking the first half of its 2026 financial year.

These results revealed a mixed performance for the hospitality giant, with room revenue up 4% to R2.03 billion, and income having increased by 5% to R3.12 billion.

The company reported an operating profit of R517 million, down 5.66% compared to the first half of the 2025 financial year.

However, Southern Sun recorded a marginal increase in profit for the period, up 0.3% to R332 million. The company’s basic earnings per share fell slightly by 0.8% to 24.5 cents per share.

These weaker results were largely attributable to Southern Sun’s offshore and Manco rewards programme, which saw their revenue and Ebitdar decline over the six-month period.

The company explained that the 29% decline it recorded in offshore revenue to R147 million was due to the temporary closure of Paradise Sun for refurbishment and weaker trading in Maputo and Tanzania.

In contrast, the group’s South African operations performed very well, with revenue for the SA Portfolio up 7.23% to R2.66 billion.

This excludes the stand-out performance from the Sandton Consortium, which grew its revenue by 15.72% to R368 million and its Ebitdar by 12.12% to R111 million.

The largest revenue drivers in the SA portfolio were the Western Cape and Gauteng, which recorded revenue growth of 9% and 3.82%, respectively.

Southern Sun’s operations in KwaZulu-Natal (KZN) also performed well, outpacing even Gauteng’s revenue growth by recording a 7.35% increase in revenue.

Notably, the Western Cape and Southern Sun’s Other operations in South Africa recorded Ebitdar growth, whereas Gauteng and KZN reported declines of 5.60% and 1.67%, respectively.

Southern Sun said its South African hotels achieved occupancy of 60.6% (2024: 59.4%) and a 6% increase in average room rates (ARR) to R1,369.

Demand for its offerings was supported by conferencing, events, and group travel in Gauteng and the Western Cape.

However, the company said transient corporate and government travel remained subdued due to delayed national budget approvals and Easter timing. 

“Recovery in these segments is ongoing, aided by upcoming G20 and B20 conferences,” the company said.

These massive events should also boost the group’s income from its Gauteng operations and the Sandton Consortium, hopefully offsetting the declines experienced in the first half of its 2026 financial year.

Southern Sun did not declare an interim dividend for the six months through September 2025.