Hotels and Gaming
achieved good earnings growth with increased operational contributions
from both segments. The transaction regarding the restructuring
of SABMiller's Hotels and Gaming interests became unconditional
on 31 March this year. This consolidated subsidiary will in future
be accounted for as an associate. The new Tsogo Sun Group is now
set to pursue an independent future with the expectation that SABMiller's
49% shareholding will be reduced over time.
The hotel industry benefited from a significant increase in foreign
visitor arrivals to South Africa which has driven strong operating
profit growth for the period. Occupancies at 72% were well up from
the 66% achieved last year. Average room rates increased by 19%, translating
into an overall revpar increase of 34% to US$32.10. The successful
hosting of the World Summit on Sustainable Development and the Cricket
World Cup were also contributing factors.
Gaming division's results were strongly influenced by the performance
of Montecasino, the division's flagship casino and entertainment
complex, which continues to trade well. The Gauteng casino market
grew by approximately 15% when measured against the previous financial
year, with Montecasino marginally gaining market share. Phase one
of the Suncoast casino development in Durban was successfully opened
in late November at a capital cost of US$95 million.