Southern African hotel giant City Lodge Hotels (CLH) is continuing on a strong growth path, recording a R600 million (€29.5m) increase in revenue for the 2022/23 financial year and a strong surge in occupancies and average room rates.
According to the group’s annual report, revenue rose from R1.1bn (€54m) in 2021/22, to R1.7bn (€83.5m) in the financial year ended June 30. The group also doubled its profits from R82m (€4m) to R164m (€8m).
Most notably, group occupancies surged to 56%, a 1.5% increase from pre-pandemic 2018/19.
“We are now seeing our recovery playing out,” said the group’s CEO Andrew Widegger. “We expect this growth trajectory to continue as it rolls out several significant developments aimed at boosting the bottom line by enhancing the guest experience.”
Revenue increases were partly driven by a 79% growth in food and beverage revenue, attributed to the introduction of new menus at City Lodge Hotels and Courtyard Hotels, as well as expanded lunch and dinner options at Town Lodge and Road Lodge brands.
Strategic developments
“The improved trading performance has allowed the group to once again focus on the value generated from its well-equipped and optimally positioned portfolio of hotels, which enable us to deliver exceptional service and an easy and seamless experience to our guests,” said Widegger.
“As a consequence of our now robust financial position, our refurbishment programmes have re-commenced to ensure our products are always in tip top condition.”
During the past year, City Lodge Hotel at OR Tambo International Airport successfully completed its kitchen extension, including equipment installation in September 2022, and now offers food and beverage solutions to guests 24 hours a day. Road Lodge Richards Bay completed its room and commercial area refresh and modernisation in April.
A major revamp is currently under way at the 207-room City Lodge Hotel V&A Waterfront, which includes a complete renovation and refurbishment of the bedrooms, and commercial area. Courtyard Hotel Waterfall City also completed a fit-out of the remaining four floors in mid-December 2022.
Outlook
“The 2024 financial year will be the year of renewed fervour into modernising and reinvesting in our portfolio of hotels, with refurbishments scheduled at 10 hotels, which will include the further roll-out of our new-generation hotel room designs to make the products more appealing to our changing guest profile and delivering an enhanced return for our shareholders,” said CLH CFO, Dhanisha Nathoo.
The group is also responding to the need for sustainable and resilient operations through the expansion of the solar programme to a further 15 hotels, in addition to the 25 hotels that already have solar energy generating capacity, and an increased focus on energy storage.
Boreholes and filtration plants are being installed at properties where water is frequently disrupted and/or the water quality is sub-standard.
Nathoo said total capital commitments authorised for the 2024/25 financial year amounted to R367.6 million (€18.1m).
