Future growth drivers

Brand affiliation

A strong brand supports a hotel's identity and competitiveness. The diversity of brands in our portfolio attracts key domestic and international market segments.

Hospitality invests solely in South Africa but it monitors both local and global macro-economic factors to identify trends. Property valuations and distributions are impacted by macroeconomic factors, which require constant focus and attention from management.
The hotel economic cycle is generally closely tied to the macro-economic cycle. The cyclical and seasonal nature of the business links into the macroeconomic environment and key analytics on trends remain crucial to support investment decisions.
Maintaining an appropriate balance of our debt and equity is critical to our growth and sustainability. Our distributions need to balance our cash requirements for reinvestment with our shareholders' expectations. We need to ensure we have sufficient flexibility to adapt to prevailing economic conditions to maintain and improve the portfolio.
Hotel operations require specialist expertise and are highly management and labour intensive. Creating strong partnerships with specialist hotel management companies protects the Fund's diversity. A constant focus on improvement and development for each hotel is necessary to maintain products that are relevant to their markets.
Strategic property investments in prime locations, where visibility and accessibility to major business hubs or points of leisure interest, are important demand drivers.
Developing and attracting a suitable management team over the short and medium term will enable us to benefit from their relevant knowledge and experience. To accurately analyse and evaluate tenant performance, we need to support the management team with the correct tools.

ENGAGING, UNDERSTANDING AND RESPONDING TO OUR STAKEHOLDERS

Corporate governance essentially involves balancing the interests of a company's many stakeholders, such as shareholders, senior management executives, customers, suppliers, financiers, government and communities. Since corporate governance also provides the framework for attaining a company's objectives, it encompasses every sphere of management, from action plans and internal controls to performance measurement and corporate disclosure.

We believe stakeholder relationships create value and build trust, mutual respect and credibility with our stakeholders which are vital to our long-term sustainability. Our communication with employees and other stakeholders is open, honest and without prejudice and is supported by a code of ethics and disclosure of information policy to guide our behaviour, ensuring our stakeholders know what to expect from us. We took our stakeholders' views into account in formulating our strategic objectives and report content.

 

 

  Investors*     Tenants
and hotel
management
companies
  Professional
suppliers and
business partners
  Employees
(10 full-time employees
based at Hospitality’s head office in Montecasino, Fourways
(2019: 19))
  Government
and regulatory
authorities
 
  • JSE SENS
  • Media releases and published results
  • IARs and financial statements
  • Annual general meetings ('AGMs') and general meetings
  • Analyst and investor presentations
  • Hospitality's website
  • One-on-one meetings
   
  • Monthly and quarterly operational reviews through analytics and direct contact with hotel management companies to review each of their hotel's performance
  • Contract management as required
  • Sub-committee, body corporate and/or Board membership to ensure good governance
  • Annual audits, sign off of annual accounts and audited rental certificates obtained
 
  • Vetted and approved development and maintenance suppliers
  • Vetted and approved specialist furniture, fixture and equipment ('FF&E') suppliers
  • Development consultants
 
  • Communication from executives and human resources
  • Internal communications and posters
  • Induction programmes
  • Ongoing training and education
  • Performance management programmes
  • Anti-fraud, ethics and corruption hotline
  • Staff wellness programme
 
  • Establish constructive relationships
  • Comment and interaction on developments in legislation
  • Membership of industry bodies, eg SA REIT Association and the Institute of Directors in South Africa
 
  • Sustainable growth and returns on investment
  • Results announcements
  • Dividends
  • Risks and opportunities of expansion
  • Transparent remuneration policy and implementation
  • Corporate governance and ethics
  • Liquidity and gearing
   
  • Absolute and relative performance
  • Benchmarking and oversight
  • Trading environment
  • Capital investment requests
  • Maintenance of contract terms
  • Good governance practices
 
  • Future business opportunities
  • Relationships
  • Project performance
  • Level of standard and service
 
  • Job security
  • Engagement
  • Performance management
  • Clear understanding of reward structures
  • Health and safety performance
  • Access to counselling and wellness programmes
  • Career planning and skills development
  • Preferred employer
 
  • Compliance with legislation
  • Job creation
  • Investment in public and tourism infrastructure
  • Investment in disadvantaged communities
  • Reduction in energy and water consumption
 
  • Macro-economic climate
  • Investment opportunity
  • Regulatory change and compliance
  • Capital capacity and opportunities
  • Portfolio management and product relevance
   
  • Macro-economic climate
  • Local authority capability
  • Investment opportunity
  • Regulatory change and compliance
  • Crime, safety, security and health
  • Capital capacity and opportunities
  • Portfolio management and product relevance
 
  • Macro-economic climate
  • Local authority capability
  • Investment opportunity
  • Regulatory change and compliance
  • Crime, safety, security and health
  • Capital capacity and opportunities
  • Portfolio management and product relevance
 
  • Macro-economic climate
  • Regulatory change and compliance
  • Crime, safety, security and health
  • Human resources
 
  • Local authority capability
  • Regulatory change and compliance
  • Crime, safety, security and health

(*As detailed in the shareholder analysis of the consolidated annual financial statements) and funding institutions, which include Rand Merchant Bank Limited, Standard Bank of South Africa Limited, Absa Bank Limited and Nedbank Limited.