The year ending June 30, 2020 has been “one of the most challenging years in the group's history”, for the City Lodge Group, according to the notes to its annual results.
The impact of the COVID-19 pandemic on the global and local economies and the travel and hospitality industry is to blame. The initial stages of the lockdown in all countries where the group operates resulted in the temporary closure of almost all its 62 hotels. But the easing of lockdown measures has seen the gradual reopening of 32 hotels across South Africa and the rest of Africa operations, based on demand.
Average occupancies for the group declined from 55% to 38%. In South Africa, occupancies decreased from 58% to 41% for the period. Total revenue decreased by 25% to R1,1bn, while operating costs, excluding depreciation, decreased by 24%. The group incurred a nett loss of R486,6m (compared with the 2019 profit of R205,5m).
South African operations’ occupancies in the last quarter of 2020 were constrained to 4%. There has been some marginal improvement in July occupancies to 7%, following the easing of lockdown level 3 regulations, which allowed for intra-provincial leisure and domestic business air travel to resume. August occupancies of 10% of total room inventory have benefited from South Africa moving to lockdown level 2 from mid-August.
The board determined that no final dividend would be paid in respect of the year ended June 30, 2020, and it does not intend to pay dividends in the short term.
The group’s expansion into Southern and East Africa is now complete, barring 26 rooms still to open at the 148-room City Lodge Hotel Maputo in Mozambique. Construction of the ‘new concept’ Courtyard Hotel Waterfall City in Midrand, Johannesburg, was set back by four months as a result of the pandemic and lockdown, and all 168 rooms are now due to open around March/April 2021.
On completion of Courtyard Hotel Waterfall City and City Lodge Hotel Maputo, the group will offer 8 070 rooms at 63 hotels in six countries.
