Ailing City Lodge looks to vaccines for recovery

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City Lodge’s interim results (for the six months ending December 31, 2020) are probably an accurate indicator of an ailing industry under extreme stress.

The group incurred a nett loss of R550,4m (2019’s equivalent period produced a profit of R46,3m). The report said this was primarily due to the impact of the COVID-19 pandemic and the prolonged lockdown measures and travel restrictions enforced by governments to control the spread of the virus.

Revenue for the period fell 73% from 2019’s R809,3m to R215,6m. Not all hotels were open through the period, but the occupancy rate for those that were open was 27%. Across all the group’s hotels, the closed hotels diluted this to a 17% occupancy rate, compared with 2019’s group occupancy rate of 54%.

In South Africa, where the group has the majority of its hotels, occupancies decreased from 57% in the previous financial year to 29%, based on open hotels only.

However, with the further easing of some of these lockdown measures in late January, February occupancies have seen a steady improvement.

The period was one of little to no corporate travel in South Africa (corporate travel has traditionally been the mainstay of the City Lodge Group), a small amount of local leisure travel, and extremely thin inbound leisure travel. The results reflected the continued challenges faced by the industry – prolonged lockdown measures, reduced travel confidence, uncertainty of further infection waves and subsequent lockdown measures, said the group’s report.

Despite the gloom, the hotel group said it was excited about the opening of its brand-new Courtyard Hotel Waterfall City, yesterday, March 1. The new flagship of the Courtyard brand, located in the vibrant Waterfall City in Midrand, features the latest technological innovation, state-of-the-art conference facilities and a full culinary team preparing delectable cuisine, says group coo, Lindiwe Sangweni-Siddo.

The Courtyard Rosebank was also refurbished in the period, but, says the interim report, all other pipeline developments have been put on hold due to the cash constraints resulting from the pandemic. The board is currently negotiating the disposal of City Lodge’s East African operations, four hotels in Kenya and Tanzania.

Andrew Widegger, ceo, said: “While we anticipate a slow recovery of the hospitality sector, we are encouraged that vaccination roll-out programmes across the world are gaining momentum. South Africa has recently begun its vaccination programme. These actions are expected to lead to improved travel confidence and boost the recovery of the sector.”

The group to date has 42 hotels open in South Africa and four hotels open in the rest of Africa, i.e. 74% of the hotels in its portfolio of 62.

Original Article Posted on SA Travel News