Covid-19 forces temporary closure of 36 Tsogo hotels

‘Total collapse of demand’ will see around 7700 rooms or 40% of the SA group’s portfolio ‘deactivated’ over the next few weeks.
The Southern Sun Waterfront Hotel in Cape Town with Southern Sun's The Culinan Hotel seen partly on the right, which are operated by JSE-listed Tsogo Sun Hotels. The group is set to temporatily close 36 hotels in SA due to the coronavirus-induced "collapse in demand". Image Supplied

Tsogo Sun Hotels Limited, one of South Africa’s largest hospitality groups, will take the unprecedented move to “deactivate” – essentially temporarily close – 36 hotel properties around the country in the wake of the worsening economic fallout from the global Covid-19 coronavirus outbreak.

It noted in a JSE Sens statement after the market closed on Friday that group forward bookings for April through June reflected “a total collapse of demand” as a result of the impact of Covid-19 and “accelerated travel bans” in SA and other several countries globally.

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“President [Cyril] Ramaphosa declared a national state of disaster on Sunday 15 March 2020, which included numerous, very necessary interventions in order to try and contain the spread of Covid-19 in South Africa which the Group is fully supportive of,” Tsogo said in the Sens statement.

“Given the environment of the past few weeks we had already implemented actions in order to reduce costs and capital expenditure, and these have now been expanded to eliminate virtually all variable costs, substantially reduce the fixed cost overheads, conserve cash in order to preserve the sustainability of our business and the people whose livelihoods depend on us,” it added.

Tsogo Hotels noted that the further reduction in costs and capital expenditure would require “a reduction of excess capacity”, which would be “implemented through an orderly deactivation of a number of hotels in the key nodes where the Group has multiple properties”.

This move will see the group consolidating the available demand into the remaining operating hotels in those areas.

Tsogo Hotels, which was unbundled from Tsogo Sun Gaming last year, did not give details of the exact hotel properties that will be affect. The group has a major presence around the convention centres in Sandton and the Cape Town CBD, as well as along the Durban beachfront and within Tsogo Gaming’s Monte Casino precinct in at Fourways, Johannesburg.

Read: Tsogo Sun cautious on hotel sector recovery in 2020

“The first phase [of the deactivation] will affect up to 36 hotels, representing 7 700 rooms (or 40%) of the Group’s portfolio over the next few weeks. There are a number of consultations and planning logistics to be finalised, however we intend to still retain significant operating capacity in our key nodes for the foreseeable future given current levels of hotels,” it said.

“In areas with a single hotel such as outlying areas in South Africa and some of the other African countries or hotels where the saving through deactivation is minimal, such as in the budget market, the Group will assess demand on ongoing basis while ensuring the operating cost of these hotels are reduced to a minimum,” it noted.

“Should there be little to no demand or future regulatory impacts that result in a total restriction of travel, the hotels will be deactivated, again with the ability to reactivate the hotels on short notice.”

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The State needs to really wake up. Rent all these hotels as “Field Hospitals” over the next few months.

Where is the money going to come from? From the tax payer? There is no money for this.

My prediction is we’re heading for a 3 month lock down. There’s a good reason why Government is now the sole “spokesman” on the Virus and THAT cannot be trusted

When your Government loots, corrupts, is bankrupt snd useless, how can we trust the statistics being fed?

They’re afraid the virus hits the townships and want to control the info by curbing any unrest

Sadly with so many souls with a compromised immune system, when and not if it spreads amongst the masses we’re all faced with untold challenges, not just Government

They’ve always been the problem, we the people will have to find the solution

This pandemic knows no race or income group

May GOD protect us!

What i forgot to mention was”mark my words” Ok i said 3 months, lets pray 21 days will curb this goggo

There’s more to a field hospital than a bed, I don’t think we have excess staff and equipment to operate them. They could be useful as self-quarantine facilities, Intercontinental are doing that in London.

this is not the way to do it!!!

“my voorstel is maak die grense oop, wees versigtig, maar laat die ekonomie voortgaan

meeste van ons doen eerlike werk, lewe n normale getroude lewe, gebruik nie drugs nie,

so dis werklik onregverdig dat ons moet betaal vir die sondes van die hiv en tb mense”

they just need so stay home and take one for the team

Correction … its not a few weeks…. its a few months!

Actually the entire industry based on foreign tourists is now completely broke.

And travel bans may be a permanent fixture on Africa since the epidemic unlikely to be locked down across the continent.

Agree … I dont think anyone will be travelling for a long time….hence a total collapse

The thing with African countries …is that the cash has already been looted by the oppresive leaders….
so similarly to Eskom…. 80% of the available funds goes to salaries ….20% is actually left for infrastructure….
the amount left over will not be enough to resolve this viral crisis … and it will perpetuate ….

Europe and US and Asia will come first for any cure…. Africa will be last (no funds available)

What happens in Vegas…Does not happen anymore!

never supported them for the last 20 years and never will for the next

End of comments.

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