Alternative business operation models in South Africa Presented by Matifadza Nyazema Executive Director, Sandton Convention Centre Johannesburg

Opened July m 2 of Exhibition & Conference space Opened July m 2 of Exhibition & Conference space Opened September m 2 of Exhibition & Conference space Opened September m 2 of Exhibition & Conference space Opened June m 2 of Exhibition & Conference space Opened June m 2 of Exhibition & Conference space

DURBAN INTERNATIONAL CONVENTION CENTRE (DICC) - First International Convention Centre in South Africa. - Expanded 2011 – current space of sq metres. - The construction was funded by the eThekwini Municipality. - The DICC – company status with a Board of Directors % owned by the eThekwini municipality. - Not required to pay back capital but covers the depreciation costs. - Has been profitable for the past few years. - Durban Convention Bureau and Kwazulu-Natal Province. BACKGROUND AND INVESTMENT

CAPE TOWN INTERNATIONAL CONVENTION CENTRE (CTICC) - O pened June 2003 – sq metres. - Funded by the City of Cape Town, a total of approximately R550 million. - CTICC did not pay back the capital but depreciation only. -CTICC has been profitable for the past 10 years. - Cape Town Convention Bureau and Western Cape. BACKGROUND AND INVESTMENT

DICC / CTICC P erception by City Authorities that CTICC does not need further support.  As a municipal entity, DICC is required to adhere to city procedures for all procurement - inhibits ability to be responsive to the market.  Hotels subsidise their venue space with revenue from accommodation which makes it difficult for the DICC to compete against hotels for smaller meetings.  Reliance on shareholder for major capital funding - compete for funds against other social priorities such as housing, water and sanitation (ALL). CHALLENGES

DICC / CTICC Since the World Cup, a better understanding of the key role that events play.  There is a growing understanding amongst city leaders of the value of events for cities.  Funding is made available to support events in the city, although there is a bias towards sporting events (in Durban).  Easier to co-ordinate planning with municipal departments as we are regarded as part of the city (Durban). OPPORTUNITIES

SANDTON CONVENTION CENTRE – division of Tsogo Holdings :casinos/hotels

ANOTHER TSOGO SUN EXPERIENCE SANDTON CONVENTION CENTRE (SCC) - Opened September sq metres. - Development was part of bid commitment made by Tsogo Sun Group (Casinos and hotels) to City of Johannesburg – bidding for Montecasino complex in Johannesburg. - Capital investment by Liberty Properties of R420 million. Liberty owns adjoining hotels. - Tsogo Sun hotels - 20 year rental agreement with Liberty properties ( ). - Management fees paid to Southern Sun. - Outsourcing of operations – food and beverage, audio visual, security. - Johannesburg Convention Bureau and Gauteng Province. BACKGROUND AND INVESTMENT

SCC CHALLENGES - High rental costs – not profitable as an independent entity. - Tsogo link – discounts. - City priorities of Johannesburg vs. Conferencing. - Greater competition from large venues. OPPORTUNITIES - The Tsogo Sun link – one stop shop for clients – 3 to 5 star hotels – 1000 Tsogo rooms adjoining. - Sales and marketing opportunities – business referral from Tsogo Sales team. - Business management opportunities – access to Tsogo Operations and standards, HR, training, Marketing, legal, international representation. - City and Province support for bidding. OPPORTUNITIES AND CHALLENGES

TSOGO SUN ADVERT

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