Surviving a bloodbath

There is very little that even the wiliest of operators could do to mitigate Covid’s devastating impact on the travel industry.

The endless run of lockdowns and the byzantine complexity of global travel restrictions have led to the dismal situation where City Lodge can report that occupancies had improved from 4% to 7% by July 2020, and eventually by the end of the financial year they had nudged up to 25%. A financial bloodbath was inevitable, and all the company could do was to limit the extent of the damage.

The company raised R1.2bn in a rights offer in August 2020, and it expresses its gratitude for the support it has received from its lenders during the period. It has sold its portfolio of hotels in East Africa, and it will use the proceeds to pay down debt and contribute to working capital.

With international travel nigh on impossible during the year under review, City Lodge has been doing what it can to boost domestic business and leisure travel.

It is banking on the success of the vaccination programme to unleash the pent-up demand for getting back to life as normal.

Adversity has led to innovation, with the company launching offerings such as #YourPrivateOffice, which enables anybody working from home to rent a room with a desk set up with a professional workstation, clearly a haven from the constant interruptions of the youth brigade.

It is also offering online check-in and QR codes in its restaurants and bars. It’s been a terrible year, and a resumption of business as usual can’t come soon enough.