The Johannesburg Stock Exchange-listed City Lodge Hotel Group (CLHG) has seen positive signs of recovery in the months leading up to the high season.
Occupancies have been bolstered by the return of international flights to almost pre-COVID levels, corporations returning to offices with an emphasis on building relationships and strategic planning.
This was highlighted in a voluntary operational statement issued earlier this week, with CEO Andrew Widegger, stating: “The lifting of the National State of Disaster in April 2022 has further facilitated positive travel trends, with businesses and individuals returning to travelling, meeting and experiencing life while nurturing relationships which had suffered during the prolonged period of lockdown.
“In addition, domestic leisure travel continues to flourish, boosted by our enhanced food and beverage offering across all brands, which has resulted in an almost 200% increase in food and beverage revenue compared with the prior year.”
Occupancies on the rise
Widegger pointed out that occupancies for the Group for the financial year to date of 56.5% have realised steady month-on-month improvements, even exceeding 2019 levels in certain months.
Monthly occupancies for the Group have grown from 52% in July 2022 to 60% for November 2022 to date. “The outlook for December 2022 occupancies looks positive and we forecast to exceed 2019 levels based on current demand and interest from our ‘Don’t skimp on your summer’ specials, advertising campaign,” said Widegger.
He noted that the increased occupancies had resulted in better yields, with achieved room rates for the financial year to date up by 9.5% on the prior year comparative period and around the same as 2019 levels.
Positive cash flows
Furthermore, added Widegger, the Group continued to generate positive cash flows, with a positive bank balance of R226 million (€13.2m) as at November 27, 2022.
The planned capital reinvestment in the portfolio is currently under way with the fit-out and availability of the remaining floors at Courtyard Hotel Waterfall City due for completion in early December 2022 and the refurbishment of City Lodge Hotel V&A Waterfront scheduled to commence in April 2023.
“Despite demand being slightly dampened by ongoing loadshedding, high inflation and interest rates, and the impact on the economy and disposable income, the outlook continues to look positive as life returns to normal and businesses and individuals embrace the freedom to take every opportunity to travel,” related Widegger.
