Product relevance to customer experience
Tsogo Sun sells experiences including hospitality, gaming, dining and entertainment. To provide the variety and quality of experiences demanded by the group’s various clientèle at the appropriate price points, the group needs to constantly monitor and invest in:- physical product that caters to the customer – including hotel operating equipment, major and minor refurbishments to both hotel and entertainment complexes, gaming equipment, tenant allowances and mind and mood infrastructure to enhance customer experience;
- technology that works for the customer and makes the product work – including gaming management systems to ensure optimal gaming floor utilisation, guest facing and back-of-house hospitality systems for in-house facilities and reservations, channel and customer relationship management;
- accessibility that allows the customer to utilise the group’s products with minimal barriers to entry – including physical facilities as simple as sufficient parking, accessibility for mobility-impaired guests, easy access to reservation systems and personnel for both trade and individual buyers and easy access to information on the group’s products; and
- branding which is critical to the way in which the group is viewed by its current and prospective customers.
Key performance indicators
| 2014 | 2013 | |
| Gaming | ||
|
71% | 63% |
|
5.3 years | 5.0 years |
|
75% | n/a |
| Hotels | ||
|
28% | 26% |
|
87% | 86% |
|
No material deviations from brand standards |
No material deviations from brand standards |
| Hygiene audits | No significant issues noted | No significant issues noted |
| Maintenance capital spend | R769 million | R579 million |
2014 performance
Product relevance
In order for the group to deliver the hospitality, gaming, dining and entertainment experiences that our customers desire, it is important that our physical product and service delivery are relevant to our customers at appropriate price points, are consistent in standard and delivery, provide the variety of experiences that will encourage repeat visits and make it easy for our customers to do business with the group. Consumer expectations range from technology preferences to the look and feel of the physical product, the location of buildings, concepts for restaurants and bar offerings, types of entertainment and travel patterns.
The group seeks to respond dynamically to changing trends, refreshing casino and hotel offerings to reflect contemporary tastes and embracing new technologies that will improve customer experience. For example, free capped Wi-Fi has been introduced at all hotel properties. It is important our casinos provide an aspirational setting in which customers can feel encouraged to wager. Therefore, we have committed to investing significantly in the regular maintenance and refurbishment of our properties in order to keep the experiences attractive and relevant to our customers. Slot machines are replaced on an approximate seven-year cycle and the current average age of slot machines is five years four months. Many of these machines, however, have been upgraded or have had game changes to ensure they remain relevant. Physical standards at hotel properties are evaluated through hotel property audits. We believe that our properties offer a superior experience to those of our peers and of other leisure activities. In order to preserve our market position and to attract existing and new customers to our gaming and hotel operations, we intend to continue our disciplined programme of investment to continually refresh the offerings and décor of our facilities. There are no material deviations from the relevant brand standards.
Product development
Development of the casino and hotel real estate is a critical component of the group’s business and its plans for organic growth. On average over the past five years, in excess of R800 million has been invested annually in the expansion, refurbishment and maintenance of the group’s existing casinos and hotels, excluding the acquisition of new properties. The ability to develop and maintain relevant physical products is a key competency required in the business and the location selection, design concept, budgetary control and project execution during construction and ongoing property maintenance are the core skills required. Key personnel are employed on a permanent basis to deliver these core skills that safeguard and mentor this knowledge. These skills are augmented by a network of experienced professionals that have worked with the business for a number of years but who are regularly supplemented with new professional firms with the objective of introducing change and fresh ideas to established methods, concepts and systems.
Information technology
Information technology strategy and governance is driven centrally with divisional teams delivering operational system-specific solutions to meet the business requirements. Both divisions predominantly utilise third-party packaged solutions which have been purpose built for the industry. Key focus areas are gaming and hotel property management systems, customer relationship management to provide relevant benefits and rewards to customers, business intelligence to drive efficiencies and digital platforms to interact with and provide connectivity to customers.
It remains our strategy to leverage off specialist application software providers and not to invest heavily in our own internally developed systems. We believe suppliers are, in general, better positioned to carry out research and development and keep pace with industry changes and the rapid evolution of technology. However, we position ourselves to actively influence application development direction through direct participation and collaborative design with our suppliers. This approach optimises our technology investment and reduces redundancy.
Our core technology differentiator will remain the manner in which we utilise and integrate the relevant features of our systems to streamline and optimise our operations, enhance the customer experience and ensure Tsogo Sun is the easiest place to do business.
Tsogo Sun master brand
In 2012, Tsogo Sun gaming and Southern Sun, the previous umbrella brand for the group’s hotel division, were incorporated into the Tsogo Sun brand, unifying the group under one name and the ‘Sunburst’ logo. This major rebranding exercise was intended to assist external stakeholders to better understand the variety of products that the group offers and the group believes it has achieved strong recognition within both the corporate and consumer markets in South Africa. The rebranding was also designed to encourage the group’s employees in both the gaming and hotel divisions to work together more effectively and to ensure consistency of culture across the Gold Reef legacy casinos and the rest of the gaming business.
The group’s marketing emphasises:- the diversity of our products, from hotels to gaming, theatre, cinemas, dining and conferencing;
- our delivery of exceptional service at excellent value;
- our depth of experience and African heritage; and
- the suitability of our hotels and entertainment complexes for both leisure and business.
The group’s retail marketing spend is directed towards its hotel offerings (mainly billboards, radio and print), although initiatives are also launched around the Tsogo Sun master brand, including television campaigns. Marketing spend in the casino business is largely focused on prize promotions, such as cars and cash. By having a centralised marketing department and plan, marketing spend at individual units can be redirected, and in some cases rationalised, to focus on marketing initiatives that are beneficial across the entirety of the group’s portfolio. In recent years this has enabled efficiencies to be made in the group’s marketing efforts, reducing cost and improving brand alignment. A consistent brand management strategy is essential in ensuring that the group’s corporate identity is not compromised and that product brands continue to be closely aligned with the master brand.