City Lodge eager to cash in on recovery

City Lodge Hotels expected to be among the first beneficiaries of an economic recovery in SA led by the reforming ANC, the company said on Thursday.

“In SA, there have been encouraging signs of improving sentiment and meaningful political change that could boost the economy — these have however yet to translate into noticeably stronger trading.

“It is expected that the group will be an early beneficiary of higher levels of confidence,” the company said.

The group’s occupancies in SA fell two percentage points to 64% in the six months to December. It attributed this to the depressed business environment and low consumer confidence levels.

In the drought-stricken Cape Town area, occupancies “remain good”. It had fallen slightly from October and this trend had continued into 2018.

“The group has taken a number of proactive steps to reduce water consumption at its six hotels in the greater Cape Town area and alternative sources of supply are being investigated,” the group said.

Group revenue decreased by 0.5% to R787m, while normalised headline earnings declined 11.6% to R174m, or 7.8% if currency movements are excluded.

The hotel operator’s share price rose 1.3% to R159.

City Lodge Hotels said average occupancies across the group dipped to 63% from 66% a year before.

While occupancies in Botswana were unchanged, Kenyan occupancies were “severely affected” by the disruptions caused by the East African country’s elections.

Occupancies in Kenya had “shown good signs of recovery in the first six weeks of 2018”.

The group’s 171-room City Lodge Hotel at Two Rivers Mall in Nairobi was partially opened in January, and was expected to be fully operational from April.

The 147-room City Lodge Hotel Dar es Salaam in Tanzania was expected to be fully operational from May or June, while the 148-room City Lodge Hotel Maputo in Mozambique was expected to open in July.