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City Lodge to expand further in east and southern Africa

Building hotels in Kenya, Tanzania, Mozambique.

Johannesburg-listed City Lodge Hotels Group is spending about R1 billion ($77 million) on further expansion in east and southern Africa, its chief executive said on Tuesday, as it seeks to cater for both the business and tourist markets there.

The owner of the Town Lodge, Road Lodge and City Lodge brands among others, is targeting capitals in the expanding economies in East Africa and consolidating its presence in southern Africa but plans to avoid Nigeria for now, the continent’s biggest economy, where it previously suffered setbacks.

“The strategy is to go into a number of the major East African capitals to start off with, and then the longer-term strategy is to find other opportunities for other brands within the group within these countries,” Chief Executive Clifford Ross told Reuters.

City Lodge currently has two hotels in Nairobi, where it saw slightly higher occupancies for the six-months ended December, under its Fairview brand and Town Lodge brand, and is currently building a 172-room hotel there.

The group is also building hotels in Tanzania, Mozambique and Namibia, while Uganda is another country which is “still very high on our radar” Ross said. The group last year dropped plans to build a hotel in Uganda because it was deemed to be too expensive.

The group, which reported a 5 percent jump in revenue to R791.3 million ($61 million) in the six months ended December, said it was also aiming to invest in the Indian Ocean island of Mauritius.

“We’ve recently been to Mauritius and we also believe that there is an opportunity in Port Louis or Ebene, the Cyber city,” said Ross. “There is a big business community, we believe there is a market there for our products and we would very much like to be there.”

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