City Lodge unpacks strong revenue
Group grow African footprint 67% The increase in the group’s average occupancies
THE CITY Lodge Hotel Group on Friday reported a 4 percentage point increase in average occupancies for the group’s local operations to 67 percent in the year to June, up from 63 percent in the previous year.
The group’s Botswana hotel continued to improve occupancies, but the Kenyan operations were affected by the perceived Ebola risk and continuing travel advisories issued by various governments with regard to security concerns in parts of east Africa, it said.
Total revenue grew by 22.6 percent to R1.3 billion from R1.06bn.
Growth
Chief executive Clifford Ross said revenue growth was assisted by a contribution from City Lodge Hotel Waterfall City, which had become fully operational in February, and from the acquisition of Hospitality Property Fund’s 50 percent stake in the Courtyard Joint Venture in May for R77.5 million.
Normalised diluted headline earnings a share increased by 18 percent to 759.9 cents from 643.1c.
A final dividend of 230c a share was declared, lifting the total dividend for the year to 460c, which is almost 18 percent higher than the 391c dividend declared in the previous year.
Ross said the group would continue to grow in South Africa in the year ahead, while looking at substantially increasing its footprint in selected African countries.
He said expansion into Africa was gaining momentum and City Lodge expected to open five new hotels in Kenya, Tanzania, Uganda, Mozambique and Namibia by mid-2017.
The listed hotel group said it was also on track to open two new hotels in South Africa by the end of the year: the City Lodge Hotel Newtown and Road Lodge Pietermaritzburg.
Ross told Business Report in June that the group had embarked on a R1bn expansion into Africa.
He said on Friday that construction on both the 169room City Lodge Hotel Two Rivers in Nairobi and 147room City Lodge Hotel Dar es Salaam were expected to commence next month), with completion expected in the first quarter of 2017.
Agreements
He said formal agreements were due to be signed shortly, relating to the 150-room City Lodge Hotel in Kampala. However, this remained subject to the completion of a detailed feasibility study.
If favourable, construction would commence in the fourth quarter of this year or the first quarter of next year, he said.
Ross added that formal agreements had been signed for the lease of land in Maputo for the development of a 148room City Lodge Hotel and construction would begin on receipt of the final development approvals.
In Windhoek, formal agreements had been signed for the development of a 151-room Town Lodge and construction was expected to commence in the first quarter of next year. Completion was scheduled for the first quarter of 2017.
Ross said the total rooms owned by the group would increase by 15 percent to 7 837 rooms once all the development projects had been completed.
The group has 52 hotels in South Africa, two in Kenya, as well as one in Botswana, offering 6 834 rooms.
Shares in City Lodge rose 6.83 percent to close at R148.50 on Friday.