Review of Operations
Hotels and Gaming
 
2003 
2002 
Financial summary
US$m 
US$m 
% change 
Turnover

212 

164 

30 

EBITA**
42 
28 
47 
EBITA margin (%)
19.7 
17.4 
 
       
Revpar* – US$
32.10 
23.98 
34 
*Revenue per available room.
**Before exceptional profit on partial disposal of subsidiary (US$4 million).
 


Left
Palazzo Hotel, Montecasino,
Sandton, South Africa
 
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.