Message from the CEO

2011 is drawing to a close at a very rapid pace. At Orion we are looking back at this year with perhaps a sigh of relief but also with a sense of pride.

The turmoil in the hospitality sector also touched our hotel division with occupancies under tremendous pressure at some of our hotels. The leisure destinations were particularly hard hit as consumers tightened their belts down to the last notch. Companies and government departments alike used conference and meeting venues with a lot more circumspection. This naturally caused extreme pressure on pricing as the players in the industry all scrambled for more business and one strategy adopted by most was to cut prices aggressively.

Despite these obvious challenges we achieved some notable milestones in the past year:

Safari Lodge, Hotel Devonshire and Wartburg hotel all notched up all time record turnovers in certain months.
Mont Aux Sources Hotel completed a R10 million refurbishment programme of 42 bedrooms, some of the public areas and some staff accommodation.
Orion Hotels signed a multi million Rand contract with Anker Data to convert all the property management systems to the state of the art PROTEL system
A multi Million Rand IT platform and connectivity project is underway. This is the precursor to a fully fledged central reservations system.
A R1 million commitment has been made to rebuild the website and all the on line booking capabilities together with social media interaction and many other useful applications.
A R5 million room refurbishment programme at Safari Lodge has commenced.
Group wide efficiency drives are bearing fruit with costs under control at most units. More work is hover required.
A management contract for the four star Euphoria Hotel, Golf Estate & Spa was secured.
A four star game lodge was acquired
A number of acquisitions & management contracts are in the pipeline.

Our property investment division, Orion Real Estate held its own despite pressure on costs, occupancies and softer rentals. Some disposals are on the cards but this will be offset by acquisitions to achieve a net growth for 2012. Property management, Security, Cleaning and Maintenance were restructured to reduce cost structures and the benefits of this together with potential BEE (Black economic empowerment) deals we see a bright future for this division going forward.

Orion Business solutions had a profitable year despite closing their recruitment division. Their renewed focus on executive coaching and coaching training programmes is paying dividends.

Orion Developments is starting to show its true potential with a number of exciting developments and redevelopments. The total of these projects amounts to around R500 million (US$ 60 million) With total gross assets of around R1 billion (US$120 million) and 1000 employees the Orion Group is well positioned to take advantage of acquisition opportunities in these times.

I take this opportunity to wish all our colleagues, guests, customers, clients, suppliers, contractors and service providers a very happy festive season and a fantastic 2012.

Kind Regards

Franz Gmeiner
Group CEO
fgmeiner@oriongroup.co.za