Leading African casino operator Tsogo Sun has officially reopened its Suncoast hotel and casino complex on Durban’s Golden Mile after two years of improvement works.
Tsogo Sun is looking to the new year with high hopes after the completion of a long-mooted casino redevelopment. In the first half of 2018 the company saw a large portion of its operational profit offset by $110m (R1.6bn) being spent on refurbishment at the Sun- coast Casino and Entertainment World and will now look to reap the rewards of the outlay.
Total expenditure at the property has now eclipsed $200m since its opening in 2002 and now begins the process of investment recouping in what could prove to be a more positive market.
Zibusiso Kganyago, development director of Tsogo Sun, commented that initial plans for the redevelopment dated back to 2008 when it became apparent that the Durban Golden Mile market climate was one ready for a grander entertainment complex than initially planned.
“We are exceptionally proud of what Suncoast now offers as a truly world-class entertainment destination. In terms of retail facilities and our commitment to providing family friendly destinations, we’ve remained true to Tsogo Sun’s values and standards,” he said.
Glenn Joseph, COO of Tsogo Sun Gaming, added: “Tsogo Sun has spent over $280m (R4bn) on casino and hotel refurbishments in the past five years, $110m (R1.6bn) of which has been invested into Suncoast in the last 24 months.
“It has been the bulk of ourvcapital expenditure focus and is testament to our confidence in South Africa and in Durban in particular.”
Suncoast has remained open throughout the course of the development – which has increased its overall floor space by some 8,000 square metres.
As part of this the casino area has been completely refurbished and seen its machine holding increase from 1,600 to 1,850 and its table count increased by four to a total of 71.
The company’s financial report for the first half of 2018 highlighted the growing importance of its amenity offering and as such Sun- coast has seen this expanded accordingly – the redevelopment project has seen the opening of three new restaurants, three retail outlets, a salon, a theatre, an expanded multi-use event space and increased customer parking facilities.
Mike Dowsley, director of operations at Suncoast, said it had been an incredible 24 months of development on this project.
“The fact that this build was completed in record time while remaining open 24/7/365 is an enormous achievement and testimony to the teamwork among all 57 contractors and our team of over 1,800 employees,” he said.
Despite economic issues and refurbishment-led partial closures SunCoast still managed to close off the six months to September 2018 $7.7m (R11m) up on the year prior. With the property now officially relaunched one would expect the site to gather pace on its upward trajectory going forward.
There are similar expectations for the South African economy as a whole, with many forecasting an uptick in 2019 although these are more than likely to be reassessed after the February budget.
The National Treasury wasted little time in reporting that S&P Global’s latest positive rating decision has at least given the country a chance to demonstrate its ability to boost currently sluggish growth.
The rating firms now expects South Africa’s GDP growth to average 0.8 per- cent in 2018 and 1.8 percent in 2019 – forecasts that are marginally higher than the 2018 Medium Term Budget Policy Statement assumptions.
Such comes as initial blue sky thinking in the wake of the Ramaphosa Government’s establishment begins to subside. The current president has been in charge of the ANC for a full year now and whist his government has continued to pursue a series of economic reforms that should help boost the economy in 2019 it continues to face structural impediments, chronic skills shortages and high unemployment.
Whether or not the nation can overcome these hurdles continues to rest heavily on the creation of an economically active populace to ease reliance on overseas visits – something that Tsogo Sun itself has banked on with the acquisition of various street- level gaming operations.
Much will ultimately come down to both the outlook of the February budget and the impending elections in May. The Government has already postponed any further discussion on its gaming regulation framework until after the ballot and would appear that the long term prospects of the nation itself are being somewhat deferred as political positioning takes the driving seat.
That said whilst such is naturally of great importance key South African operators are banking on the future being a brighter one regardless of who holds reigns of Government. The reopening of SunCoast may just be a new dawn for the nation’s gaming market.