Product relevance to customer experience
- 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
| 2015 | 2014 | |
| Gaming | ||
|
72% | 71% |
|
76% | 75% |
|
5.4 years | 5.3 years |
| Hotels | ||
|
29% | 28% |
|
87% | 87% |
|
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 | R749 million | R769 million |
2015 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. It is important that 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 to ten-year cycle and the current average age of slot machines is 5.4 years.
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, R1 billion 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 are 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.
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 remains 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.
The replacement of the legacy gaming management systems at the six properties where it was required has been completed.
Tsogo Sun master brand
Subsequent to the merger of the gaming and hotel division under one market-facing brand in 2012, the group has been diligent in its focus to build the master brand with all relevant stakeholders. To date, Tsogo Sun has achieved strong recognition within both the corporate and consumer markets in South Africa. This has enabled the brand values to permeate the business internally, aligning the group’s employees and creating a consistency of culture. In support of the group’s purpose to create great experiences for our guests, Tsogo Sun’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 predominantly directed towards its hotel offerings (mainly billboards, radio and print), albeit with a focus on supporting the Tsogo Sun master brand at all times. This is complemented by dedicated Tsogo Sun group exposure, which includes targeted partnerships and sponsorships and a dedicated group television campaign. 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 group’s entire portfolio. In recent years this has enabled efficiencies to be made in the group’s marketing efforts, reducing cost and improving brand alignment.
A clear brand portfolio strategy supported by structured brand management principles, which include the consistent application of Tsogo Sun’s ‘Sunburst’ across properties as well as the use of a common endorsement, has become essential in ensuring that each of the brands in the group are aligned with the Tsogo Sun master brand’s brand values. In this way each product brand contributes to the growth of the Tsogo Sun master brand.
Customer satisfaction
Understanding our guests makes it possible to offer them products and services that they want. Tracking levels of guest satisfaction is important to us as it allows us to interrogate feedback with the intention of delivering consistent experiences across the group. This is integral to our success and sustainability. The group purpose to ‘create great experiences’ drives engagement as satisfied guests are directly correlated to great experiences, which in turn creates loyalty to our brands and properties.
Consistency of brand delivery is made possible by each brand operating according to a set of brand operating standards. These standards are audited annually at hotels and on an ad hoc basis at casinos. The audits are complemented by data obtained from feedback received from approximately 10 000 guests per month across the business via the eGuestSurv post-stay survey, as well as from third-party sites such as TripAdvisor.
The guest satisfaction for Tsogo Sun hotels averaged at 87% this year which is equal to the result last year. The high guest satisfaction score at Tsogo Sun hotels is a result of enhanced awareness of our guests’ needs and our ability to respond to them efficiently and effectively. The eGuestSurv tool has also been successfully entrenched into the casinos with an annual overall average of 76% guest satisfaction.
Customer reward programmes
Tsogo Sun’s hotel and casino rewards programme is designed to encourage relationships of mutual value with customers by giving benefits and rewards to cardholders. It provides the group with detailed information about trends across its customer base that enables Tsogo Sun to improve our offering in response to changing consumer behaviour and to meet the demands of top-tier active reward club members more effectively.
Last year the new rewards programme replaced the Frequent Guest programme in hotels; and the Club Festival and Strike it Rich programmes in casinos. While our gaming management systems do not allow for full portability of rewards and benefits, the rewards programme provides patrons with consistent card status levels, rewards and benefits across the group.
Key components of the programme include:- the programme has three status levels – gold (entry level), platinum (mid-level) and black (top level);
- the higher the status level, the higher the value of the base benefits offered;
- the status level for hotel cardholders is determined by revenue rather than nights stayed and cardholders are offered rewards based on their spend at our properties and the frequency of their visits;
- cardholders earn points for playing slots and tables and hotel cardholders earn SunRands for qualifying revenue in hotels;
- all cardholders receive accommodation discounts (5% at selected service hotels and 10% at full service hotels);
- there are no restrictions for the redemption of SunRands and no minimum amount or day of the week restrictions;
- hotel cardholders can redeem SunRands for food and beverage, even when they are not staying in the hotel;
- hotel cardholders qualify for 1G free Wi-Fi per day;
- all cardholders qualify for restaurant discounts between 7.5% and 20%, depending on their status level;
- all cardholders qualify for entertainment discounts at Tsogo Sun entertainment venues; and
- hotel cardholders qualify for food and beverage and movies at discounts at all casino properties.
Tsogo Sun gaming – rewards programme segmental analysis
Tsogo Sun gaming had 310 475 active gaming cardholders during the year. The contribution to total gaming revenue for the year from active members of the reward programme is as follows:| Segment | 2015 % active customers |
2015 contribution % |
2014 % active customers |
2014 contribution % |
| Black | 8 | 46 | 7 | 45 |
| Platinum | 15 | 15 | 11 | 14 |
| Gold | 77 | 11 | 82 | 12 |
| 100 | 72 | 100 | 71 |
Tsogo Sun hotels – rewards programme segmental analysis
Launched in the last quarter of the previous year, the Tsogo Sun hotels’ rewards programme has shown tremendous growth in the number of members, with 24 506 new members who have signed up. Tsogo Sun hotels had 87 666 active reward programme members during the 2015 financial year. The contribution to total hotel revenue for the year from active members of the reward programme is as follows:| Segment | 2015 % active customers |
2015 contribution %* |
2014 % active customers |
2014 contribution %* |
| Black | 5 | 7 | 4 | 7 |
| Platinum | 16 | 7 | 13 | 9 |
| Gold | 79 | 15 | 83 | 12 |
| 100 | 29 | 100 | 28 | |
| * Systemwide | ||||
Customer safety
Tsogo Sun recognises that the health, safety and wellbeing of our customers and employees is of paramount importance. Life safety equipment and procedures are maintained at high levels of quality and compliance at all our facilities. Compliance with best practice in life safety, health, hygiene and fire protection is a non-negotiable element of our management systems.
Each property undergoes rigorous safety inspections as part of the Organisational Resilience Management Standard audit process, and deviations from the agreed standards and incidents and events are reported and resolved.
All Tsogo Sun hotel, casino and restaurant properties, including outsourced restaurants, undergo an independent audit every second or third month, which covers food safety practices and compliance to the group standard, as well as legislated elements. Temperature control, personal hygiene, good manufacturing practices, product traceability and storage, cleaning programmes and pest control are included. Audits are strictly unannounced and include surface swabs, hand swabs and food samples, which are selected at random during the audits and assessed for microbiological quality. No significant issues were noted.
Looking ahead
Customer reward programmes
The focus for the next year will be on using the programme to influence behaviour and ultimately hotel and casino revenue. Using SunRands in hotels and FreePlay in casinos, as well as a variety of entertainment and dining offers, customers will continue to be encouraged to increase their spend and frequency of visits to our hotels and casinos.
