Update: This headline has been changed. Previously it stated that City Lodge saw a decrease in their interim results.
During the six months to December 31, 2017, average group occupancies fell to 63% from 66% in the previous interim period, but were in line with occupancies for the 2017 financial year.
Total group revenue decreased by 0.5% from R791,3 million (€54 million) to R787,1 million (€54 million), benefiting from a slightly below-inflation increase in room rates. Total operating costs remained constant.
Normalised profit before tax for the group decreased by 12.1% from R275,2 million (€19 million) to R241.8 million (€17 million) while normalised headline earnings decreased by 11.6% from R 197,1 million (€14 million) to R174.3 million (€12 million), impacted by the rand’s sharp strengthening in December.
The Group reports progress with its targeted African expansion programme with new hotels in Kenya, Tanzania and Mozambique expected to be operation by the end of July.
South Africa
In South Africa, the 62-room extension of City Lodge Hotel at OR Tambo Airport is on track for completion by the end of May, increasing capacity to 365 rooms.
Earthworks have begun for the development of a 158-room Town Lodge at Umhlanga Ridge and planning is at an advanced stage for the development of a 90-room Road Lodge in Polokwane.
Group Chief Executive, Clifford Ross, said: “In South Africa there have been encouraging signs of improving sentiment and meaningful political change that could boost the economy. While these have yet to translate into noticeably stronger trading, it is expected that the group will be an early beneficiary of higher levels of confidence.”
He added that the group had taken a number of proactive steps to reduce water consumption at its six hotels in the greater Cape Town area and alternative sources of water supply were being investigated.
In Botswana, occupancies were on a par with the previous interim period. In Kenya, occupancies were severely affected by disruptions caused by the country’s election and the subsequent re-run. In South Africa, occupancies were impacted by depressed business and consumer confidence.
Kenya
The 171-room City Lodge Hotel at Two Rivers Mall in Nairobi, Kenya, opened its first 40 rooms in January and is expected to be fully operational in April. Ross said occupancies at the Kenyan operations had shown good signs of recovery in the first six weeks of 2018.
Tanzania
The 147-room City Lodge Hotel Dar es Salaam is on track to be fully operational during May/June.
Mozambique
The 148-room City Lodge Hotel Maputo is scheduled to open in July.
