Courtyard Virginia Hotels|"Good year For City Lodge Hotels"

Source              :   bdlive.co.za
Category         :   Courtyard Virginia Hotels
By                   :    NICK HEDLEY
Posted By      :    Hotels in Virginia Beach North Courtyard

Courtyard Virginia Hotels

JSE-listed City Lodge Hotels on Wednesday reported the results of "a good year" to the end of June, with improving occupancy rates contributing to a 31% rise in diluted normalised headline earnings per share to 578.3c. CEO Clifford Ross said while occupancies were still below their long-term average, "it is encouraging that occupancies are going in the upward direction, albeit rather slowly". "We have come through a fairly tough time as an industry, with a lack of demand on the one side and overcapacity on the other," Mr Ross said. City Lodge, which is "refreshing" its branding to better differentiate its four brands, increased its average occupancies by 3 percentage points to 62% in the year ended June.

The improved occupancies, together with the first-time contribution from City Lodge’s joint venture in two Kenyan hotels, translated into an 11% revenue increase to R975.9m. While operating costs, excluding depreciation, rose 11.7%, the increase in the group’s operating costs per room sold was limited to 5.8%.

In line with its African-expansion intentions, the group opened the 104-room Town Lodge Gaborone in mid-May, adding to its interests in the two Kenyan hotels. Financial director Andrew Widegger said City Lodge had encountered difficulties in securing the site for its planned hotel in Pietermaritzburg, but was "still hopeful that we will achieve that by the end of this calendar year". City Lodge is also "very close to finalising agreements for the leasing and development of a City Lodge Hotel in Waterfall City" near Midrand, Mr Widegger said.

North of South Africa’s borders, City Lodge has "signed a couple of memorandum of understandings in Kenya and one in Ghana — but negotiations are tough and slow". Mr Widegger said these were nonbinding agreements. In addition, there are "at least another three that we are working on". The group is targeting further investments in South Africa and opportunities in Southern African Development Community (Sadc) countries. Electus investment analyst Warren Jervis said while he had expected "a slightly higher occupancy rate", City Lodge had reported a "great result". "Despite the benign environment", Mr Jervis said, City Lodge had achieved good numbers by managing well what it could control, "which says to me that they’re very good operators". Mr Jervis said it had taken time for the group to work through the excess supply that it had brought on ahead of the 2010 Fifa World Cup. "But if you look at their long-term average occupancies, it’s around 75%", although City Lodge had reached average occupancy levels of about 83% before. An improvement in economic conditions would accelerate City Lodge’s return to normal occupancies, which would "generate some really good numbers".

Source : bdlive.co.za/business/transport/2013/08/14/good-year-for-city-lodge-hotels