SA hotel stocks surge as key international tourism markets lift travel restrictions

Author Name
Rugare Mukanganga
Markets 1 month ago

South African hotel and gaming stocks Sun International, Tsogo Sun Hotels, Tsogo Sun Gaming, and City Lodge Hotels Group surged to hit 52-week highs on the JSE on Monday, buoyed by several key international source markets lifting Covid-19 travel restrictions and expectations that the UK will remove SA from its red-list this week.

President Cyril Ramaphosa moving the country to its lowest Covid-19 restriction of Alert Level 1 as of Friday (October 1), due to a dramatic fall in infections, is another contributing factor.

The move means hospitality and gaming groups that run casinos, restaurants and other leisure facilities can trade for longer hours due to the curfew now being at midnight. The sale of liquor is also allowed on Fridays and weekends.

  • Sun International, which owns Sun City and the Table Bay Hotel, surged more than 11%, trading at around R23 by midday on Monday.
  • Tsogo Sun Hotels, SA’s largest hotel group, traded almost 12% up at R3.58 a share.
  • City Lodge Hotels was up more than 12.6% (trading at around R4.72) at midday, after surging by over 17% in early morning trade.
  • Tsogo Sun Gaming was up over 5.5% and trading around R11.29 a share.

The surge saw the travel and leisure sector on the JSE being the top performer on Monday morning, trading over 6% firmer overall.

Other leisure-focused investment stocks, such as Hosken Consolidated Investments, which owns a stake in Tsogo Sun Gaming, also hit a year high. It was up over 5.5%, trading at around R78.11 a share.

With the likes of Germany, the United States and the Netherlands removing SA from restrictive travel ban lists, more international tourists who are vaccinated will find it easier to travel to the country.

Now, all eyes are on the UK which still has SA on its red list but has been facing increasing pressure to remove SA from the list.

He cited stock price surges in City Lodge, Tsogo Hotels as well as the gaming groups.

While UK officials originally raised concerns around the Beta variant in SA and queried Covid-19 vaccination certification, the country will be re-evaluating its red list this week.

A re-evaluation is expected to see the UK’s red list of destinations cut to nine from 54.

Fully-vaccinated travellers coming from countries including South Africa, Brazil, Mexico and Indonesia are anticipated to no longer be required to self-isolate in government hotels for 10 days when they arrive in the UK.

Notably, there are claims that SA tourism has lost about R6.2 billion in business between February and September this year as a result of the country being on the UK’s red list.


Article originally published by Moneyweb

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