Southern Sun grew its South African revenue by 10% in the first five months of its financial year, with the hotel group highlighting the All Blacks’ August tour as one of the events that helped drive demand.
Group occupancy increased from 57.8% to 60.2%, while the average room rate rose by 9.5%, supported by stronger event, conference and leisure activity.
Southern Sun specifically highlighted Rugby’s Greatest Rivalry, which brought the All Blacks to South Africa for a high-profile series against the Springboks.
Major sporting events bring value beyond the stadium
The performance offers an indication of the wider commercial value major sporting events bring to host cities.
Matches involving teams with large travelling supporter bases generate demand beyond stadium gates, benefiting hotels, restaurants, transport providers and other tourism businesses.
This effect is particularly valuable during periods when corporate and leisure travel are not enough to lift hotel occupancy significantly.
Southern Sun’s results suggest the rugby tour formed part of a broader improvement in demand rather than being the sole driver of growth. Conferences and other events also contributed to the stronger performance.
Still, the group’s trading update provides an indication of how international sport translates into measurable hospitality demand, particularly when fixtures are spread across several cities and attract travelling supporters.
Domestic and regional travel remain under pressure
Despite the stronger overall performance, Southern Sun said transient and domestic leisure travel remained subdued during the period.
The group attributed this partly to pressure on household disposable income and anti-immigration protests that made travellers from the Southern African Development Community more cautious about visiting South Africa.
The comments come against a backdrop of marches led by the civic movement March and March against undocumented migrants, as well as government efforts to send diplomatic envoys across the continent to explain its new immigration measures.
The trading update indicates that regional travel is being affected by domestic political developments at the same time that major events are helping stimulate hotel demand.
Southern Sun expects headline earnings to rise
Southern Sun also told shareholders to expect headline earnings for the six months to September to increase by at least 20%.
However, the group cautioned that the comparison will become tougher during the second half of its financial year because last year’s base included the B20 and G20 conferences hosted in South Africa.
The latest performance highlights two contrasting forces affecting South Africa’s hospitality sector. A five-week rugby tour helped lift demand across several cities, while concerns surrounding anti-immigration protests made some regional travellers more cautious about visiting the country.
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