Discounted rates fill up City Lodge suites

City Lodge says it continues to fill more rooms at its hotels as local travellers take advantage of discounted rates to escape the confinement of their homes following the lockdown. But corporate guests are still limited as many companies continue to work remotely in the short term.

In a trading update, the hotel group said occupancies in SA had steadily improved from the fourth quarter of last year, when they measured just 4%. In July, occupancies increased to 7% and built up to 28% last month. Achieved occupancy, based on the rooms available at its 42 open hotels in SA, was 37% and it said numbers for this month continued to improve, with bookings for the upcoming festive season at its coastal hotels increasing steadily.

The group said it continued to contain costs to help preserve and improve liquidity. In April, salaries were cut by 50% for all employees who couldn’t work remotely due to the nature of their work. Salaries were increased to 60% in September and 70% last month, with the reductions subject to ongoing reviews. It said it was assisting affected employees with applications for revised UIF benefits.

Still, due to the low occupancies and some hotels remaining closed, it said earnings and headline earnings per share for the six months to end-December were likely to be more than 20% lower than last year.

The Group remains well-positioned to re-open its hotels at short notice and it is anticipated that all of the South African hotels will reopen by February 2021,” City Lodge said.
Meanwhile, following an unsolicited non-binding offer for its hotels in Kenya and Tanzania, it said negotiations were progressing, with another announcement expected in due course.

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