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In the financial year ended June 30, 2018, the City Lodge Hotel Group reported a decrease in average occupancies to 59% from 63% in the previous financial year. Group revenue decreased by 1% to R1,5 billion (€89.7 million).
The hotel group cited trading conditions in South Africa, where it has 54 hotels, as the main reason for the decrease. “[The trade conditions have been] impacted by low business and consumer confidence, [which has been] exacerbated by the lack of clarity on the policy of land expropriation without compensation. South African occupancies fell to 61% from 63%.”
Occupancies in the greater Cape Town area were affected by the Day Zero water-saving campaign which caused some travellers to shorten or cancel their stays. “In general, across the country, the length of business travel stays has been shortened, partly due to budgetary constraints.”
Occupancies in Botswana were in line with the 2017 financial year, but occupancies in Kenya were weaker due to the re-run of the country’s elections and an overhang of hotel accommodation in Nairobi due to the introduction of new supply. “There were encouraging signs of recovery in the second half of the year.”
Commenting on the outlook for the 2019 financial year, newly appointed CEO, Andrew Widegger, said in South Africa the new financial year had seen a continuation of the soft trend experienced in the 2018 financial year.
“It is unlikely that there will be a meaningful change in sentiment until after the country has held its general election, which is likely to take place in the second quarter of 2019. The outlook for our hotels located outside South Africa has shown encouraging signs of improvement and the group will benefit from the opening of the new hotels,” he said.
City Lodge Hotel Group expects to open new hotels in Dar es Salaam and Maputo by the end of October as part of its targeted African expansion strategy.
Source: tourismupdate.co.za
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