The City Lodge Hotel Group’s (CLHG) interim results for the six months to December 31, show that the numbers are on an upward trajectory after two years of pandemic-induced losses.
Revenue reached R436 million, up from R215,6 recorded in the same period (July to December 2020) for the 2021 financial year.
Five hotels open in the Rest of Africa (RoA) for the group reached 34% occupancy over the July to December 2020 period which saw the group only achieve 27% occupancy level and South African properties reached 36% over the 29% occupancies recorded in the same period in 2020.
CLHG CEO, Andrew Widegger, noted that the new financial year had a particularly tumultuous start due to the severe third wave of COVID-19 infections and hospitalisations caused by the Delta variant.
“This caused travel hesitancy, and the level 4 lockdown restrictions, which banned leisure travel to and from Gauteng during the key winter school holiday period. The violent civil unrest in South Africa in July increased the negative impact on trading operations over this period. Gratefully, the group suffered no property damage as a result of the protests in KwaZulu Natal.
“However, the majority of the hotels in the area closed temporarily due to safety concerns and lack of fuel and food supplies, and resumed trading as soon as the situation stabilised,” he said.
Widegger explained that, as infection rates steadily declined, travel confidence returned. “This positively impacted occupancies and pricing and resulted in additional hotel reopenings. The gradual easing of restrictions, the accelerated roll-out of vaccinations across all adult groups, including young adults, and the removal of South Africa from international ‘no-fly’ and ‘red lists’, boosted business and leisure travel confidence,” he said.
Average occupancies for the interim period at the group’s South African operations, based on total hotel room inventory, was 32%, with the low of 16% in July and a high of 43% in November.
“The discovery of the Omicron variant in South Africa in late-November 2021, and the almost overnight shut-down of international travel routes to South Africa, resulted in a setback in demand, which was substantially picked up by the domestic leisure market. December 2021 occupancies for the South African open hotels averaged 43% with 53 hotels open, and five hotels open in the Rest of Africa.”
Outlook
Widegger pointed out that January occupancies had had a slow start, with total group occupancies at 30%. He said, however, that demand had gained momentum as more corporates and government departments returned to their offices and travel schedules resumed, to re-ignite operational capacity which had lagged over the past two years.
“The group has reopened all its 56 South African hotels, and has six of the seven hotels opened in Rest of Africa.
“To date, for the month of February, South African occupancies are running at 46%. We anticipate improved monthly occupancy and pricing recovery during the next two trading quarters,” said Widegger.
He added that the group was looking forward to completing the disposal of its East African operations before the end of April.
“The proceeds will be applied to strengthen our financial position and enable us to resume hotel refurbishment plans. The CLHG family remains committed to providing outstanding accommodation services and welcoming our guests to tantalise their taste buds with our new food and beverage offerings,” said Widegger.
