Our strategic priorities in this focus
|Integrate gaming and hotel divisions
|Improve marketing and sales capability
|Review business procedures to achieve efficiencies
|Insource food and beverage operations
|Deliver on financial goals
|Although the South African casino market is relatively mature,
with a number of established operators, we believe that we
can still improve the performance of our properties by growing
revenue into new areas, being more competitive and driving
Historically, the Group operated within two defined silos: a
gaming division and a hotels and resorts division. After a
review of the operating environment and our strategy, the
Group has undergone a process to change our operational
structure to integrate our hotels and resorts and gaming
divisions so that they now function as one team with one
reporting line (the COO). We believe this will enable us to
leverage our unique resort property portfolio to increase
revenue (in particular gaming revenue) across all our properties.
The business is now segmented by geography:
- South Africa
- Other Africa
- Latin America
|Between geographic regions we are still seeking to foster
much closer collaboration on both our approach to how we
do business and our approach to our guests. So if you're a
Platinum Most Valued Guest (MVG) at the Federal Palace in
Nigeria, and you fancy a game of golf at Sun City, no problem!
Our General Managers at each unit are now being incentivised
at both a unit and Group level, to foster a Group-oriented
We believe that our assets can be better leveraged as a
key competitive advantage to attract gaming guests both
domestically and also from previously untapped international
The Group has an enviable depth of management, many of
whom have been with us for their entire careers. However, I feel
we may have started to lose our ability to see and do things
differently or innovatively. The approach to gaming and casino
operations has evolved in other regions of the world, many of
which deal with the same challenges that we now face. To
make sure we learn from their experiences, we have successfully
recruited a fresh international perspective into the business with
the appointment of Stuart Wing as COO. Stuart has extensive
global gaming experience in the Australian and New Zealand
casino industries, which from a market and regulatory
perspective are not dissimilar to South Africa. Initially contracted
as a consultant, he has now been brought onboard to assist
in driving many new initiatives that have been identified as
opportunities for improving performance.
In the process of interacting with him as a consultant, and
indirectly interviewing him, I raised a number of questions with
Chief Operating Officer
|Q: What excites you about the prospects for
|Sun International really is a unique organisation
– it is a globally competent casino operator but,
more importantly, has an amazing portfolio of
unique properties, with a diverse spread of
operations, and is a premium five star hotel
operator – probably number one in South Africa.
And South Africa is a great country!
|Q: What similarities are there between the Australian and South African gaming markets?
|The Australian market is highly competitive,
generally characterised by having a single casino in
a town, but with a number of electronic gaming
machines in the immediate area. So the challenges
facing the industry are similar. The scale and
product offering of casino properties in South Africa
is similar to what you see in Australia, and the
infrastructure is similarly sophisticated. Customer
bases and their behaviours, as well as the regulatory
and union framework are also similar.
|Q: What initiatives can be implemented to
further grow revenue in a mature market?
|There are a number of programmes that can be
implemented to improve penetration into existing
markets. In markets where we are not the sole
supplier – like Johannesburg and Durban – there is
a great opportunity to become more competitive. We
can leverage the intelligence we gather from, for
instance, the implementation of the EGS and our
Customer Relationship Management (CRM) system,
to drive powerful changes in guest behaviour.
I would argue that relative to the competition, we
have a superior offering with largely irreplaceable
assets – no one is going to build another Sun City.
So there are plenty of opportunities for growth in
the domestic market as well as for expanding our
|Q: Are we operating efficiently in terms of
structure and costs?
|Given the generally higher cost of operating in
both New Zealand and Australia, casino operators in
that part of the world have had to get extremely
efficient and there is no doubt that there is an
opportunity to change the way that the Group
operates to achieve efficiencies without impacting
on guest experience.
|Q: How about marketing and sales – is there
room for improvement?
|Absolutely. In hotel sales, you can argue that
we have been under-represented in key growth
markets – in particular Asia. As the traditional
markets of Europe are not showing strong growth
we should reconsider how best to approach those
markets on a cost-effective basis.
To put it simply, the marketing and sales approach
needs to become more focused and the skills base
needs to be improved.
|Q: And the importance of the internet as a
marketing and sales channel? What should we
be doing to strengthen our online presence?
|The website needs to get better and more
efficient, including the online booking function. The
next stage is the optimisation of the properties, so
that Sun International improves its ranking in search
engine listings. We also need a branding exercise to
improve the look and feel, as well as include further
|Stuart stepped into the role of COO on 1 July 2013 following
the retirement of Garth Collins (and many, many thanks to
Garth for his enormous contribution). Since then we have been
busy implementing a number of the initiatives identified, both
by him and by the existing management team, to improve our
It is clear that the guest experience is a central thread that unites
many of our ongoing strategic initiatives. In this industry, there
is little differentiation to be had in slot or table games; instead it
is the experience we consistently offer our guests and their
families that will keep them choosing Sun International. Our
unique properties are a clear competitive differentiator that we
can better leverage to offer a great guest experience, but there
is more that can be done:
Potential to insource
|Housekeeping and food and beverage are key touch points for
our guests, and it is important for the Group to ensure that
the guest experience is enhanced as far as possible in these
areas. Many of these services are currently outsourced to
service providers and we are reviewing these arrangements
and questioning whether we are optimising guest experience,
revenue generating opportunities and the wellbeing of the
employees involved. Insourcing would increase our control over
areas like service quality and training, and let us guide guest
excellence initiatives to a greater degree.
Improve marketing and sales capability
|We are currently developing a new brand strategy and have
appointed a brand strategist/PR manager to augment our skills
base in this area. With an enhanced focus on attracting
gaming guests from international markets, we are repositioning
our sales teams in the key source markets of the United States,
Latin America, Middle East and Asia. We are also opening
offices in Australia and Singapore and establishing sales teams
in key African countries.
To align our marketing structures with the new operating
model, we have integrated gaming and resort marketing and
Group entertainment under one manager.
The Group's gaming marketing ensures that all our guests
enjoy the best value-for-money gaming experience possible.
This includes ensuring that the latest and most popular
machines and games are on our casino floors, guest service is
of the highest standard, gaming promotions are innovative
and exciting, and that we provide our guests with high quality
entertainment and a comprehensive and varied range of food
and beverage facilities.
The individual property brands feature consistently in the industry
as major tourism attractions in southern Africa.
Review and refresh most valued guest offering
|In the gaming industry, it generally holds true that most
revenue is generated from a small percentage of players. Our
MVG loyalty programme remains our key value offering to top
players and is available in all Group casinos, including Monticello
in Chile where it has become the benchmark. The programme
has four card tiers, each offering distinctive privileges to members
at all Sun International hotels, resorts and casinos, with
benefits becoming increasingly valuable as guests progress up
through each level. The MVG Platinum card qualifies our toprated
MVGs for the very best rewards across the Group. This
exclusive card gives our top players the status, benefits and
recognition they deserve in acknowledgement of their
patronage. The MVG Platinum card is highly sought after by
our guests, and continues to be the best-performing sector of
our customer base.
We are researching and conceptualising the evolution of the
MVG loyalty programme to ensure it remains relevant and
creates value for the Group and our guests. We continue to
offer exclusive entertainment and gaming options across all
our properties to ensure our MVGs enjoy the benefit of being
Integrate our customer relationship management and gaming systems
|The optimisation of our CRM technology is ongoing, with
specific work streams focusing on maintaining data quality,
and growing our capability in digital channels such as the web
and social media. We are also adding online capabilities to our
customer contact centre, to interact and transact with our
We have identified the most appropriate system to achieve these
aims, which should be fully operational within the year ahead.
The CRM system is just one of the many IT-related initiatives that
we are busy with and that should enhance our guest experience.
In today's gaming world the "Business" and "IT" disciplines are
converging rapidly and we require extremely close cooperation
between the two. At present we are well advanced in the
installation of the EGS which is replacing our aging in-house
developed Casino Management System. The new technology is
based on modern architecture, which enables online and mobile
capability and has been enhanced with unique features for
Sun International's operations. We have worked with Bally
Technologies to create a cutting edge (in global terms) gaming
system utilising smart card technology that also offers Groupwide
functionality – which means that whichever of our
properties countrywide you choose to enter, your card will
instantly be recognised – and due to the "smart" card we will
immediately know your preferences – not just your points, but
being greeted with "Welcome to Sibaya – would you like the
same gin and tonic that you had at GrandWest?".
In a casino environment the experience is about winning and
the strength of the Bally product is its advanced enterprise
bonusing options that engage and excite guests. We can also
run targeted mini jackpots and wide area progressives, where
our guests at different casinos can play against each other,
competing for the same prize.
In addition to CRM and EGS, our hotel and resort systems are
being upgraded to provide a fully integrated view of our
guests. We also plan to extend our MVG loyalty programme
across our properties – one loyalty card that is recognised and
for which points are earned, not just in gaming but in our
hotels and restaurants.
Achieving operational efficiencies in the "back of house" part
of our business is also a key component of our drive to improve
the performance of existing operations. We are introducing
an ERP system that will streamline business processes across
various functions in the Group (finance, human resources,
procurement), reducing not only systems costs but enabling us
to better monitor and manage functions such as procurement
and the utilisation of resources such as electricity.
Given all that is happening in the IT space, a man with a lot of
pressure on him is our Chief Information Officer, Thabo Ndlela.
Thabo has been with the Group for three years and joined at a critical time in the evolution of the IT/business interface. He is currently
managing IT-related projects with a cost of around R1 billion and so I interact with him frequently to question and make sure that all is
Chief Information Officer
|Q: How is the EGS implementation going? Where are
we on timing and budget?
|The project has been successfully been deployed at
Morula, Carousel, Carnival City, Meropa and Sun City.
We are very happy with not only the implementation but
the way in which the operational staff and our guests have
adapted to it. All South African operations will be complete
by June 2014, and the system will be rolled out at
Monticello in Chile during the 2015 financial year. As we
move on to our larger properties, the team has benefitted
from the learning curve developed over the past six
months. We do not anticipate any implementation issues,
we are ahead of the anticipated time frame and we are
|Q: Regarding our guest experience, will EGS interact
with our CRM system and what improvements can we
|Yes, our CRM system pulls information from EGS to
support what we call a 'single view of the customer'. For
instance, the sharing of data is helping to thrill our guests
with our advanced interactive guest interface. We are using
smart card technology (which also helps with cash
management by reducing our exposure to running cash
around the casino) and our iView touch screens to deliver a
host of additional features on our machines. These include
targeted one-to-one communication and marketing, and
loading and redeeming points.
CRM is being extended to include hotel guests while
supporting campaign management and leads generation.
It leverages master data management, sourcing information
from across the transactional gaming, hospitality and enterprise business applications. It pulls guest information
to one place, giving us a view from room and concert
bookings, to gaming preferences and entertainment
interests. It will drive improvements in the analytics of our
business and guest behaviour.
|Q: Is it necessary to implement an ERP system and
what benefits are there to be gained?
|The ERP system is essentially a back-office system that
will consolidate 15 systems deployed in 96 versions used
across the Group. The scope includes finance, human
resources, supply chain, project and document
management, and areas like plant maintenance. Our goal is
to fundamentally change and improve operations in these
This project has a number of benefits. First off, it's about
reducing cost – we are targeting a saving of around 42% in
systems costs over seven years. Bear in mind that this is just
a systems cost saving – there is the additional benefit of
consolidating functions throughout the Group.
Secondly, it will help us automate key business processes.
There are currently a number of processes that require
manual facilitation, for instance, in capturing time and
attendance, scheduling shifts, and applying leave
conditions. The ERP system will introduce consistent
internal controls and help reduce human error.
Also, with one system you have consistent architecture,
making system support simpler throughout the Group.
And the system will be centralised – so we will no longer
have multiple instances of applications running at different
properties across the Group.
|Q: Which ERP system have we chosen and how long
will implementation take?
|After extensive due diligence, including participation
from all affected users, we have decided to go with IFS, a
European-based ERP system. We have also appointed
Accenture as the systems integrator. We are planning to
commence implementation during the current financial
year and should be complete within 24 months at a cost of
|As can be seen, we are undertaking a number of initiatives in
the IT area and this is a trend that we can expect to continue as
improvements in technology continue to drive developments in
our industry. In recognition of this, and as highlighted in the
Chairman's report, we are seeking external and independent
expertise to join our IT governance committee, to which we will
appoint an individual with relevant global gaming experience.
In summary, as I look at the operations side of the business,
there is a lot that we are doing to ensure that we continue to show improvement in revenues, operate efficiently and enhance
our guest experience in an environment that is increasingly
competitive. I am confident that with all the steps being taken
we will maintain our position as the premier gaming company
in South Africa and further entrench our reputation as a
globally competent manager of casinos, as we seek out new
opportunities in other jurisdictions.