The South African casino industry is set to hold a high-level meeting on Tuesday to discuss the Covid-19 coronavirus outbreak and come up with an industry response to assist in curbing the spread of the virus.
That’s the word from Anthony Leeming, chief executive of gaming and hospitality giant Sun International. He was speaking to Moneyweb on Monday following the release of the group’s full-year results to the end of December 31, 2019.
“We want to do everything we can as an industry to play our part in stopping the spread of the virus. Right now, the financial consequence of the virus on the gaming and hospitality industry is secondary,” he said.
Watch: Sun International hopes to weather the storm
On the JSE all major gaming and hospitality industry stocks continued to slide on Monday following the announcement by President Cyril Ramaphosa that “state of disaster” measures will come into effect this week. This includes travel bans for major European nations, together with the US, China, South Korea and Iran; in addition to the closure of schools for a month, banning overseas travel for government officials and gatherings of more than 100 people.
Despite posting positive full-year results, Sun International’s share price slumped 15.19% on Monday. It closed at R20.27 on the JSE as the local market tracked global markets, which have taken a hammering as the economic fallout from the coronavirus epidemic continues.
Sun International’s industry peer Tsogo Sun Gaming was down almost 9%, while the recently unbundled Tsogo Sun Hotels group slumped just over 15%. City Lodge Hotel group was the hardest hit, plunging 16.72% to a record low of below R30.
Leeming said Sun International’s global operations in Peru and Panama had already been affected by the global pandemic, with the governments in those countries closing casinos. Its operations in Chile, which were impacted by civil protests in that country last year, may also be affected as the Chilean government is set to come to a decision on closing casinos and other entertainment venues with the next day or two.
In South Africa, Leeming said Sun International had not yet seen a major drop in patrons at its casinos, which includes the likes of Sun City in the North West, Boardwalk Casino in Port Elizabeth, the new Time Square casino complex in Pretoria, Sibaya Casino in Durban and the Grand West Casino in Cape Town.
However, he conceded that the group’s iconic hotels like the Table Bay in Cape Town and the Palace of the Lost City at Sun City have already felt the negative impact of the virus with cancellations of inbound foreign tourists. The group is also seeing cancellations of conferences and other events within its hotels and casino complexes.
“With up to 80% of the guests at the Table Bay Hotel traditionally being international tourists, we are really going to feel the impact there. Most of these guests come from Europe and the US, which are affected by the travel ban put in place by government to curtail the spread of the virus in SA,” he said.
“It is still too early to assess the impact of the virus on the gaming and hospitality industry in SA, however, we have to brace for a tough few months ahead. Inbound foreign tourism will be impacted, but Sun International makes most of its revenue from its casino operations,” noted Leeming.
“If the government is forced to close shopping malls, casinos and other entertainment spaces in the event of the virus spreading more widely in SA, then that’s a much bigger issue to deal with. However, currently, we have several measures in place including having more hand santisers within our hotels and casinos. We have also trialled heat scanners that we plan to role out to our casinos,” he added.