Southern Sun eyeing new markets in Africa

BY BUSINESS REPORTER AND AGENCIES

SOUTHERN Sun, the hotel unit of listed casino and hotel group Tsogo Sun, is eyeing opportunities to expand its Garden Court and StayEasy brands into African countries over the next five years.

The hotel unit already has an establishment in Dar es Salaam and would now embark on an expansion program to the other East African Community (EAC) states.

"There are opportunities in Africa in the value-for-money segment and we are testing the appetite for budget accommodation with our StayEasy hotel in Lusaka," Southern Sun’s MD Graham Wood said yesterday.

The Zambian hotel opened in November and was "trading well", Mr Wood said.

Hotels in Africa have traditionally been full-service hotels, he said. "I believe there is an opportunity for the mid-market, value propositions (in Africa). The growth is there, but it’s difficult growth. "

Challenges facing investors in the hotel sector in the rest of the continent included access to land, identifying the right partners, and the cost of construction, which could be two and a half times more than in SA, he said.

Southern Sun wanted to expand its presence in East and West Africa and expected to have something in place in the next five years in order not to lose out on the developing African hotel market, he said.

Higher growth differentials in Africa were what was attracting hotel groups to consider investing in the continent, he said.