Hotel and resorts operator Southern Sun has reported a 21% increase in full-year attributable earnings to R1.24 billion for the year ended March 2026, driven by a robust recovery in domestic trading and major international events. The group’s total income rose 9% to R7.2 billion, underpinned by a 10% increase in South African operations to R6.8 billion. The performance allowed the group to declare a dividend of 30 cents per share, up 20% from the prior year.
The group experienced an acceleration in trading momentum during the second half of the financial year. This was largely catalysed by a resurgence in corporate and leisure travel, alongside major conventions such as the G20 Social Summit held in Gauteng in November 2025. South African hotels recorded an occupancy rate of 64.3%, an improvement from 61.9% in the previous year, while average room rates increased by 5% to R1,505.
This combination of higher occupancy and pricing power lifted domestic rooms revenue to R4.6 billion. The broader South African tourism sector has seen domestic expenditure surpass pre-pandemic levels, though inbound international tourism continues a more gradual recovery trajectory.
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Conversely, the group’s offshore portfolio faced significant headwinds, with income declining 4% to R377 million. Overall offshore occupancy slipped to 39.5% from 40.5%, and average room rates contracted by 15%, exacerbated by a stronger rand. The first half of the year was impacted by the planned closure of the Paradise Sun resort in the Seychelles for refurbishment.
While the resort’s reopening initially spurred strong demand, this momentum was abruptly curtailed by the outbreak of the Middle East war in late February 2026, which materially reduced the critical airlift from the Middle East into the island nation. In Mozambique, severe fuel and US dollar shortages further stifled hospitality demand.
Despite these regional challenges, Southern Sun continued to allocate capital toward strategic upgrades, completing refurbishments across 652 bedrooms during the year at key properties including Southern Sun Newlands, The Cullinan, and Mount Grace. Management indicated that while certain projects may be deferred to preserve cash in response to specific market dynamics, the group remains committed to expansion in structurally attractive markets.
Domestically, the group noted that while it has not yet experienced a material adverse impact from rising fuel costs, the future effect on the South African economy remains an area of uncertainty.
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