No impact on SA hotels from Middle East conflict, says Southern Sun

South African hotels and leisure giant Southern Sun reports that it has “not experienced a material adverse impact” on its local operations from the fallout of the Middle East conflict, which has affected hotel demand and tourist flows to Gulf nations like Dubai and Qatar, as well as to destinations such as the Seychelles.

It highlighted this in its latest full-year results to the end of March 2026, released on Tuesday, which showed a strong performance on the back of the G20 Leaders Summit and related events in SA, plus better performance from its Durban beachfront and broader KwaZulu-Natal portfolio. The Cape Town market remained robust.

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“The group delivered a strong performance in the 2026 financial year. Trading momentum increased in the second half of the year, with broad-based improvements across all regions underpinned by major international conferences and events, including the G20 in Gauteng and improved transient demand in South Africa,” Southern Sun said in its results filing on the JSE.

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“Offshore hotels benefited in the second half of the year with the successful reopening of Paradise Sun [in Seychelles], which experienced strong demand until the impact of the Middle East war in March 2026 and marginal improvements in trading in Mozambique. To date, the group has not experienced a material adverse impact on its South African operations,” it added.

“But the impact of increased fuel costs on the SA economy going forward is uncertain,” the group warned.

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Southern Sun said it remains well-positioned to withstand a potential downturn.

“A strong balance sheet supports the funding of development initiatives through existing facilities and operational cash flows. This financial flexibility preserves optionality for shareholder returns, including opportunistic share buybacks or special dividends, while maintaining resilience through the cycle.”

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The group reported income growth of 9% [to R7.2 billion] for FY2026, with overall hotel occupancy levels increasing 2.1 percentage points to 62.9%. Ebitdar [earnings before interest, taxes, depreciation, amortisation, and restructuring or rent costs] surged 12%, to R2.4 billion.

Southern Sun’s adjusted headline earnings per share jumped 19% to 90.1 cents, which saw its final dividend for the financial year being hiked 20%, to 30c per share.

The group’s share price firmed around 3%, following the release of its latest results.

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