Tomorrow (2 December) will see the official opening of the Sibaya Casino and Entertainment Kingdom near Durban. This is the latest casino complex that Sun International has added to its stable, and there is another project in Bloemfontein in the pipeline. Work has already begun on the R145 million casino complex planned for Bloemfontein, but it will be the company’s last in South Africa.

Peter Bacon, Chief Executive of Sun International, has said that although gaming revenues are up 20% from last year there is no longer any area for growth in the South African gaming market because of a regulatory cap on licences. The recent strength of the Rand and the weakening Dollar has encouraged tourists to look outside South Africa for holiday destinations. Consequently, Sun International room revenue has only increased by 3% but, helped by gaming revenue, earnings before EBIDTA were up 33% to R360 million.

The state of the local economy has had much to do with the good earnings results. A drop in interest rates and the growth in consumer confidence has given the South African economy a lift and consumers with more money in their pockets to spend on leisure activities. With no further opportunity for expansion in the country, Sun International is looking further afield. There are projects to develop and operate a limited number of urban casinos in the United Kingdom, once the new Gambling Law is in place. However, once again the company has come up against a proposed cap on leisure destination casinos, which may necessitate a re-evaluation of possibilities.

When interviewed last September, Peter Bacon said that Sun International were looking to develop projects in other African countries. They already have a complex on the Zambian side of the beautiful Victoria Falls, and a plan for casino, spa and conference centre in Luanda is at due diligence stage. West and East Africa are also under consideration, particularly the once favourite holiday destination of Laurenço Marques in Mozambique. However, after years of faction fighting the fragmented infrastructure of the country makes development difficult.

Ron Stringfellow, Chief Executive of the Tsogo Sun Group with casinos in South Africa and the largest hotel chain in the southern hemisphere, has made an impassioned plea for “hotel development to be high on every African leader’s list of the infrastructure needed to help the continent recover from decades of war and neglect.” Whilst it may be thought that there is an element of self-interest in the concept, it actually makes a great deal of sense, as he goes on to explain.

Tourists can choose not to visit a country but businessmen must go where the client is to be found. Bad and insecure hotels make any trip as short and infrequent as possible, which is no way to encourage investment. Investors will not commit shareholders’ money before an economy is stable and prosperous, but African leaders can identify and promote good hotels as an essential start to other economic developments. Hotels are therefore as important to the infrastructure of a country as roads and airports.

South Africa remains a popular tourist destination with much to offer and good value for money. The quality of the hotels and casino complexes and an excellent customer service ethos means that tourists’ expectations are mostly exceeded. A great model for the rest of Africa, and even futher, to emulate.

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