Despite the challenges faced by the hospitality sector following the pandemic, the industry has remained resilient, with the CEOs of South Africa’s biggest listed hotel groups being paid as much as R32 million for their efforts. <\/p>\n\n\n\n
Leading a hospitality business in South Africa has become a daunting task for CEOs post-Covid-19. <\/p>\n\n\n\n
The hospitality sector is a vital contributor to South Africa’s economy, generating significant employment and revenue. <\/p>\n\n\n\n
Before the Covid-19 pandemic, tourism, including hospitality, contributed 6.9% to the GDP and supported over 1.5 million jobs. <\/p>\n\n\n\n
However, the sector faced severe challenges due to the pandemic, leading to a contraction. <\/p>\n\n\n\n
The pandemic severely impacted the sector, as financially strained consumers had been spending less on hotels for years after the pandemic. <\/p>\n\n\n\n
This challenge was compounded by the slow resurgence of tourism in the country, which further stained the industry. <\/p>\n\n\n\n
CEOs had to navigate shrinking revenues, rising operational costs, and the struggle to attract guests.<\/p>\n\n\n\n
As the economy gradually recovers, the hospitality industry remains crucial, with efforts focused on revitalising domestic tourism and enhancing international appeal to regain its economic impact and employment potential. <\/p>\n\n\n\n
Strategic agility, innovation, and cost management are crucial to keeping businesses afloat, yet the uncertain economic climate makes long-term planning particularly difficult. <\/p>\n\n\n\n
Despite this, major hotel players report encouraging results, showing recoveries to pre-pandemic levels.<\/p>\n\n\n\n
This required resilience and creative solutions to sustain operations in the current economic environment.<\/p>\n\n\n\n
This was evident in both company reports and economic surveys. <\/p>\n\n\n\n
According to the Bureau for Economic Research\u2019s (BER\u2019s) latest other services survey, business confidence in the hospitality sector ticked up from 62 in 2024Q1 to 64 in 2024Q2.<\/p>\n\n\n\n
This is above the long-term average, which is positive considering that the sector is entering the off-season period.<\/p>\n\n\n\n
“This level remains over the long-term average, and it is encouraging to see the subsector maintain its upbeat performance,” it said. <\/p>\n\n\n\n
The biggest hotel group by market cap, Tsogo Sun\u2014with a capitalisation of around R11.7 billion\u2014noted the positive turn.<\/p>\n\n\n\n
“The in-house management of the hotels is running smoothly, and the group\u2019s portfolio of hotels for the financial year has record results. <\/p>\n\n\n\n
“The saving of historical management fees and central cost charges has yielded the most significant positive impact,” it said. <\/p>\n\n\n\n
City Lodge Hotels added that, much like the rest of the industry, it had invested in sustainable solutions to enhance resilience, such as solar power and boreholes with filtration plants. <\/p>\n\n\n\n
These proactive environmental measures contribute to our business resilience and align with our commitment to offering guests a reliable sanctuary from life\u2019s complexities. <\/p>\n\n\n\n
As the pandemic-related challenges begin to subside, City Lodge Hotels’ average occupancy for 2023 stood at 56%, showing impressive progress from the previous year\u2019s 38%. <\/p>\n\n\n\n
The average room rates in South Africa increased by 12% for the year. <\/p>\n\n\n\n
CEO pay<\/strong><\/p>\n\n\n\n BusinesTech looked at the three biggest hotel companies by market capitalisation listed on the Johannesburg Stock Exchange (JSE) to see what their CEOs earned last year.<\/p>\n\n\n\n These companies are Tsogo Sun, Sun International, and City Lodge Hotels.<\/p>\n\n\n\n Tsogo Sun\u2019s Chief Executive Chris Du Toit, the top-paid hospitality CEO on this list, earned a whopping R32.28 million.<\/p>\n\n\n\n This works out to R621,000 per week and R88,438 per day. <\/p>\n\n\n\n This figure includes base salary, short-term incentives, cash bonuses, benefits, and long-term incentive plans.<\/p>\n\n\n\n This is almost three times the salary paid to City Lodge Hotels’ Andrew Widegger, who took home the \u2018smallest\u2019 amount of R11.25 million.<\/p>\n\n\n\n Sun International Anthony Leeming was the second-highest earner of the three, taking home R23.93 million, or R460,300 per week. <\/p>\n\n\n\n The table below outlines what these CEOs earned in 2023\/24 and how that translates per week.<\/p>\n\n\n\nCompany<\/th> CEO<\/th> Market Cap.<\/th> Annual remuneration<\/th> Earnings Per week<\/th><\/tr><\/thead> Tsogo Sun<\/td> Chris Du Toit<\/td> R11.71 billion<\/td> R32.28 million <\/td> R620,800<\/td><\/tr> Sun International <\/td> Anthony Leeming<\/td> R9.95 billion<\/td> R23.93 million<\/td> R460,300<\/td><\/tr> City Lodge Hotels <\/td> Andrew Widegger<\/td> R2.51 billion<\/td> R11.25 million<\/td> R216,300<\/td><\/tr> Average<\/strong><\/td> <\/td> R8.06 billion<\/strong><\/td> R22.49 million<\/strong><\/td> R432,466<\/strong><\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n
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