Less tourist spend pinches Sun International profits

A GENERAL decrease in spending from international tourists as a result of a stronger rand has pinched at growth in some Sun International hotels, the group said when reporting its financial results for the six months ending December 2005. David Coutts-Trotter, Sun International chief executive designate, told TNN that tourists were “buying down”, which put pressure on rate and occupancy at the high end of the market. “This accords with statistics that indicate that whilst visitor volumes have grown, individual visitors are spending less in rand terms,” said Coutts-Trotter. He added that the group is looking to new international markets to grow volumes and he expected 2006 to be “a little stronger” than 2005. Sun City’s occupancy fell 2% to average at 75%, while occupancy at The Palace fell 7%. The group’s Zambia resort showed strong growth, with occupancy up 4% to 69%. Operations in other neighbouring countries – Botswana, Swaziland, Namibia and Lesotho – did not perform as well as expected, said Coutts-Trotter. “Demand in both Swaziland and Botswana has been impacted by the weak economic conditions prevailing in those countries.” Overall room revenue for the group grew by 7% to R334m with average occupancy at 77%, up 1,6%. The gaming division saw strong growth, with revenue up 19% on the previous year. All four established casinos showed double-digit growth and expectations were that their new ventures – Windmill Casino and the new casino in Worcester – would perform well. (Darren Sandras) darrens@nowmedia.co.za