Southern Sun has achieved its strongest monthly occupancy since the 2010 FIFA World Cup, signalling a robust recovery for South Africa’s hospitality sector as the crucial summer trading period approaches.
Group-wide occupancy climbed to 73.3% in October, driving an 18% surge in revenue and a 27% leap in earnings before interest, taxes, depreciation, amortisation and rentals for the month. According to the trading update released on Wednesday, this sharp improvement positions the hotel operator for a significantly stronger second half, with major events including the G20 summit in 2026 and a packed domestic calendar expected to fuel further demand.
The October performance provided welcome relief after a more restrained first half to 30 September 2025, during which total income edged up 5% to R3.1 billion. Domestic hotels carried the growth, posting an 8% rise in revenue, while offshore operations suffered a 29% decline largely due to the planned refurbishment closure of the Paradise Sun resort in the Seychelles and softer trading conditions in Maputo and Dar es Salaam.
South African properties achieved a solid 60.6% occupancy rate over the six-month period, supported by a 6% increase in average room rates to R1,369. Rooms revenue reached R2 billion, buoyed by strong conferencing, events and group bookings in Gauteng and the Western Cape. Corporate and government transient travel, however, remained subdued owing to delayed national budget allocations and the earlier timing of Easter.
Cost pressures intensified across information technology, utilities and distribution platforms, contributing to a two-percentage-point contraction in group ebitdar margin to 26%. Offshore trading losses of R9 million added further drag, leaving headline earnings per share up a modest 2% at 24.8 cents and ebitdar flat at R818 million. In line with previous practice, no interim dividend was declared.
During the period the group successfully refinanced its debt, securing new two-year revolving credit facilities maturing in September 2027 with an option to extend to 2028. Net debt increased to R481 million from R266 million at the prior financial year-end.
Looking ahead, management cautioned that persistently high interest rates continue to weigh on consumer and corporate confidence. Nevertheless, as reported by Business Day, anticipated interest-rate reductions, cooling inflation and South Africa’s recent removal from the Financial Action Task Force greylist are seen as supportive tailwinds. Analysts at Moneyweb suggest that sustained occupancy above 70% through the peak season could push full-year earnings materially ahead of the prior year.
Southern Sun shares rose 2.1% to R9.85 in morning trade on Wednesday, taking gains for 2025 to more than 44% and underscoring investor optimism about the sector’s post-pandemic revival.