City Lodge elects to be poll positive
City Lodge Hotels CEO Andrew Widegger says he is confident the national elections in May will bring stability to SA’s hotel market.
City Lodge Hotels CEO Andrew Widegger says he is confident the national elections in May will bring stability to the hotel market in SA.
Speaking after the release of the company’s financial results for the six months to December, Widegger said he believed the company’s fortunes would gain a boost in 2020, after it had navigated 2019’s difficult business environment.
“I think we will get an election result which will be very positive for SA and business. Better policies will come and investment and economic growth will return. Our business will improve along with it,” he said on Thursday.
Widegger said the owner of budget to mid-range hotels in SA and other parts of Africa, including Uganda, Namibia, Mozambique and Tanzania, struggled in 2018 because of weak business confidence and having to drop room rates.
But he is optimistic the elections this year will deliver positive results.
City Lodge’s average occupancy across its hotels during the six months to December fell from 63% to 58%, compared with the previous corresponding period. Its earnings per share (EPS) fell 12% to 378.9c from 430.4c. Business travel bookings declined. The company declared a dividend of 229c per share, down from the 253c it declared in the six months to December 2017.
I THINK WE WILL GET AN ELECTION RESULT WHICH WILL BE VERY POSITIVE FOR SA AND BUSINESS. ECONOMIC GROWTH WILL RETURN
Widegger said his team was “happy with its performance” given the operating conditions.
“Things are very tough out there and I think our results are fair, even if we cannot take many positives from them. The rest of 2019 will be tough in the run-up to May’s election.
“Load-shedding will also have a negative impact on operations, but hopefully by the end of 2019 SA will be more stable and good decisions at the top will make 2020 good for us and business in general,” he said.
Meanwhile, the group announced it would develop another hotel within its Courtyard Hotel brand, in Waterfall City north of Johannesburg.
Construction of the 168room hotel, which is a land and building lease agreement with JSE-listed property company Attacq and the Barrow Group, is expected to begin in March with completion expected in October 2020.
The hotel will feature 10 levels, a rooftop bar area and a 100-seater conference facility. It will have 160 rooms, as well as eight suites, meeting rooms, a swimming pool and a gym.
City Lodge already owns a 149-room hotel in the Waterfall City complex.