Chief Executive Officer’s review

Product relevance to customer experience

Some two years after our rebranding, Tsogo Sun continues to build on its success and its journey towards being an established household name, in both the corporate and consumer markets in South Africa. The essence of the group’s products remain onsite experiences, as in order for our customers to consume our product they need to physically visit our properties, be it for theatre, dining, gaming or hospitality.

In order to keep our experiences attractive, the group’s products need to be relevant and accessible to the customer. Accordingly, we have again invested significantly in both distribution of physical product and maintenance capital expenditure in our various properties. In addition, the group continues to allocate significant human and financial resources to systems ensuring that the offering at each property is relevant to the market it serves.

The current focus of expanding and refreshing our casino properties assists in ensuring that they remain relevant in the market in which they operate. During the 2014 financial year we completed the R206 million expansion and renovation of the Emnotweni Casino in Nelspruit and commenced works on the R560 million redesign and expansion of the Silverstar Casino and the R630 million redevelopment of the Gold Reef City Casino and Theme Park.

Operationally, a significant amount of work continues to be done on the continual refresh of gaming products on our floors and guest facilities and amenities at our hotels. There are a number of exciting initiatives that have been launched in the 2014 financial year including the introduction of free guest Wi-Fi in all our hotel properties and the consolidation, redesign and relaunch of our various reward programmes in the gaming and hotel divisions.

We have refocused our food and beverage operations to ensure our delivery is relevant and appealing to our customers and supportive of the gaming and rooms operations. The launch of two new in-house brands Vigour & Verve and Grill Jichana was a key focus of the department in the period and we anticipate rolling out a number of these outlets at our various destinations.

Regulatory compliance

The group enforces a culture of compliance at all levels of the organisation, relating to all relevant laws and regulations. Compliance is not limited to intensive gaming regulation requirements, but also involves having systems and review processes in place to understand and abide by laws in areas as diverse as liquor and fire regulations, health and hygiene standards, labour, competition and consumer practices.

While we respect the important role that the various regulatory bodies play in society and business in general and towards the affairs of the group specifically, we have been, and are still, forced to challenge elements of law and regulation that we believe are misguided or will have unintended consequences on the group and its customers. We will continue to defend our commercial rights while maintaining a cordial and cooperative relationship with various levels of government.

We remain in dispute with the Mpumalanga Gambling Board over their intention to impose the achievement of a level 2 BBBEE score as a licence condition. While the group has already proudly achieved this benchmark, the ability of government to arbitrarily change the scoring criteria of the codes of good practice means that the group can never agree to such an imposition as a condition of its gaming licences.

Human resources

Tsogo Sun aims to recruit staff with the best skills and attitudes available. We then provide an enabling and positive work environment. The launch of a single group employee engagement programme during the year, together with the Tsogo Sun Academy, which controls all aspects of the group’s employee training and development programmes, is a significant step to further ensure a proper work environment for employees. We firmly believe that engagement is often as important to derive the best performance from a workforce as are the levels of remuneration.

Staff turnover, which has reduced substantially over the last decade, remains within acceptable levels. The remuneration report here highlights the group’s philosophy towards remuneration and incentivisation, ensuring we retain valuable talent.