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Despite cash constraints City Lodge opens new Waterfall City hotel

Group reports after-tax loss of R550m for its half-year, as pandemic continues to affect occupancies.
The Courtyard Hotel at Waterfall City in Gauteng. Image: Supplied

JSE-listed hospitality group City Lodge went ahead and opened its new-generation 4-star Courtyard Hotel Waterfall City in Gauteng on Monday – its 63rd hotel on the African continent.

The move comes despite group CEO Andrew Widegger anticipating “a slow recovery” for the hospitality sector in the face of the Covid-19 pandemic. Only around half of the hotel’s 164 rooms will initially be made available to the market.

The group, which still has around 16 hotel properties closed due to lower demand, reported a R550.4 million after-tax loss on Friday for its half-year ending December 31, 2020 (compared with a R46.3 million profit for the period in 2019).

It said total revenue decreased by 73% to R215.6 million. This came on the back of its hotel occupancy levels averaging just 17% for the period, compared with 54% for the prior financial year.

“In South Africa, where the group has the majority of its hotels, occupancies decreased from 57% in the previous financial year to 18% [for the half-year], and 29% based on open hotels only,” the group noted in a media statement.

However, it said it has seen a “steady improvement in occupancies” since the last quarter of its 2020 financial year (April to June), when occupancies plummeted to just 4%.

During the initial Covid-19 hard lockdown last year almost all hotels were closed, except for those providing quarantine facilities to repatriated citizens, and essential and critical business continuity services.

Opening up

As lockdown levels and international travel restrictions eased, occupancies gradually improved to 28% and 27% of its total inventory in November and December respectively, it said.

“The group continues to review demand when assessing whether to reopen hotels and to date has 42 hotels open in South Africa and four hotels open in the rest of Africa [or 74% of the hotels in its portfolio],” it added.

The launch of its new hotel on Monday means the group now has 43 hotels currently trading.

Attacq, developer of the Waterfall mega-development and majority owner of Mall of Africa, developed and owns the hotel, with City Lodge appointed to manage the property under its upper market Courtyard hotel brand.

Read: Attacq to build high-rise apartments and hotels at Waterfall City

This is the group’s second hotel at Waterfall City. A City Lodge-branded property has been operating there since Mall of Africa opened in 2016.

City Lodge chief operating officer Lindiwe Sangweni-Siddo said the group is excited about the new hotel, which features the latest state-of-the-art conference facilities. “The new flagship of the Courtyard brand, which is located in the lively and vibrant Waterfall City in Midrand, marks a significant milestone in hotel design and development,” she said.

Read:
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The hotel will initially operate 84 bedrooms, four suites, all restaurants (two restaurants and a ‘club lounge’ private dining and event venue), a 100-seater conference centre, gym and co-meeting areas.

The remaining 80 rooms will open in phases during the next few months based on demand.

City Lodge completed the refurbishment of its Courtyard Hotel in Rosebank, next to the Gautrain station, in December and reopened it in January.

All other pipeline developments have been put on hold due to the cash constraints resulting from the pandemic, but Widegger stated that it is “encouraged that vaccination roll-out programmes across the world are gaining momentum.”

“South Africa has recently begun its vaccination programme. These actions are expected to lead to improved travel confidence and boost the recovery of the sector.”

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