City Lodge Hotels Limited has reported an increase in occupancies and revenue for the six-month period ending December 31, 2014, particularly with regard to its Road Lodge brand.
The JSE-listed operation has increased its occupancies across its South African operations by four percentage points to 68%, boosting its local revenue by 10,6% to R583,2 million.
Within South Africa, the Road Lodge brand, unlike in the previous year, increased its occupancies. Occupancies were lower at the Courtyard brand, reflecting ongoing over-supply in the four-star hotel market, the hotel group said in a statement.
Total revenue, including the group’s two Kenyan hotels which were not consolidated in the previous corresponding period, rose by 20,3% to R642,4 million.
Commenting on the second half of the financial year, Groupe Chief Executive, Clifford Ross, says the trend of higher occupancies has extended into January and the first half of February. “It is expected that this trend will continue, given the combined effect of gradual GDP growth and limited supply of new hotel capacity entering the market.”
The group currently has a number of local developments in the pipeline. Its newest hotel – the 149-room City Lodge Hotel Waterfall City – became fully operational at the beginning of February. City Lodge Hotel Newtown (148 rooms) is on track for completion toward the end of 2015, while construction will soon begin on the 90-room Road Lodge Pietermaritzburg, scheduled for completion in November.
Regarding its expansion plans elsewhere in Africa, the group says detailed design work is at an advanced stage for the development of the 169-room City Lodge Hotel Two Rivers, Nairobi, and the 147-room City Lodge Hotel Dar es Salaam. Earthworks are expected to begin in the second quarter of 2015 with both hotels scheduled to open during the fourth quarter of 2016.
In Kampala, Uganda, a memorandum of understanding – which is dependent on the finalisation of a financial feasibility study – has been signed for the possible development of a 150-room City Lodge Hotel. Another memorandum of understanding, which is also subject to certain conditions, has been entered into for the possible development of a 140- to150-room Town Lodge in Windhoek, Namibia. Negotiations are also at an advanced stage with the view to developing a 150- to 160-room City Lodge Hotel in Maputo, Mozambique.
